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CIRCULAR DATED 29 JANUARY 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

Singapore Exchange Securities Trading Limited (the “SGX-ST”) takes no responsibility for the

accuracy of any statements or opinions made, or reports contained, in this Circular. If you are in any

doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor,

accountant or other professional adviser immediately.

Approval in-principle has been obtained from the SGX-ST for the listing and quotation of the

Consideration Units (as defined herein) on the Main Board of the SGX-ST. The SGX-ST’s in-principle

approval is not to be taken as an indication of the merits of the Proposed Acquisition (as defined

herein), the Consideration Units, the Manager (as defined herein), Ascendas Real Estate Investment

Trust (“A-REIT”) and/or its subsidiaries.

If you have sold or transferred all your units in A-REIT (“Units”), you should immediately forward this

Circular, together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form

in this Circular, to the purchaser or transferee or to the bank, stockbroker or other agent through whom

the sale or transfer was effected for onward transmission to the purchaser or transferee.

(Constituted in the Republic of Singapore

pursuant to a trust deed dated 9 October 2002 (as amended))

MANAGED BY

ASCENDAS FUNDS MANAGEMENT (S) LIMITED(Company Registration No. 200201987K)

Independent Financial Adviser to the Independent Directors of the Manager

Hong Leong Finance Limited

CIRCULAR TO UNITHOLDERS

IN RELATION TO:

(1) THE PROPOSED ACQUISITION OF ONE@CHANGI CITY

(2) THE PROPOSED ISSUANCE OF NEW UNITS AT AN ISSUE PRICE OF S$2.223 PER UNIT AS

PARTIAL CONSIDERATION FOR THE PROPOSED ACQUISITION OF ONE@CHANGI CITY

IMPORTANT DATES AND TIMES FOR UNITHOLDERS

Last date and time for lodgement of Proxy Forms : 13 February 2016 at 3.00 p.m.

Date and time of Extraordinary General Meeting (“EGM”) : 16 February 2016 at 3.00 p.m.

Place of EGM : Aperia, 10 Kallang Avenue

Tower 1, Level 3 Rose Room

Singapore 339510

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TABLE OF CONTENTS

Page

CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

INDICATIVE TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

LETTER TO UNITHOLDERS

1. Summary of Approvals Sought. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

2. The Proposed Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

3. The Proposed Issuance of the Consideration Units . . . . . . . . . . . . . . . . . . . . . . . . . 17

4. Rationale for and Benefits of the Proposed Acquisition and the Proposed Issuance of

the Consideration Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

5. Details and Financial Information of the Proposed Acquisition . . . . . . . . . . . . . . . . . 20

6. Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

7. Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

8. Abstentions from Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

9. Action to be Taken by Unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

10. Directors’ Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

11. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

12. Documents Available for Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

IMPORTANT NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

APPENDICES

Appendix A – Details of One@Changi City, the Existing Portfolio and the Enlarged

Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

Appendix B – Valuation Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

Appendix C – Independent Financial Adviser’s Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

Appendix D – Existing Interested Person Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . D-1

NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1

PROXY FORM

1

CORPORATE INFORMATION

Directors of Ascendas

Funds Management (S)

Limited (the manager of

A-REIT) (the “Manager”)

: Mr Koh Soo Keong (Chairman and Independent Director)

Mr Miguel Ko (Vice-Chairman and Non-Executive Director)

Mr Manohar Khiatani (Non-Executive Director)

Mr Teo Eng Cheong (Non-Executive Director)

Mr Chan Pengee Adrian (Independent Director)

Mr Teo Choon Chye, Marc (Independent Director)

Mr Wong Yew Meng (Independent Director)

Ms Chong Chiet Ping (Independent Director)

Ms Lim Sau Hoong (Independent Director)

Mr Tan Ser Ping (Executive Director and Chief Executive

Officer)

Registered Office of the

Manager

: 1 Fusionopolis Place

#10-10 Galaxis

Singapore 138522

Trustee of A-REIT (the

“Trustee”)

: HSBC Institutional Trust Services (Singapore) Limited

21 Collyer Quay

#13-02 HSBC Building

Singapore 049320

Legal Adviser for the

Proposed Acquisition and

to the Manager

: Allen & Gledhill LLP

One Marina Boulevard #28-00

Singapore 018989

Legal Adviser to the

Trustee

: Shook Lin & Bok LLP

1 Robinson Road

#18-00 AIA Tower

Singapore 048542

Unit Registrar and Unit

Transfer Office

: Boardroom Corporate & Advisory Services Pte. Ltd.

50 Raffles Place

#32-01 Singapore Land Tower

Singapore 048623

Independent Financial

Adviser to the

Independent Directors of

the Manager (the “IFA”)

: Hong Leong Finance Limited

16 Raffles Quay #40-01A

Hong Leong Building

Singapore 048581

Independent Valuers : Knight Frank Pte Ltd

(appointed by the Manager)

16 Raffles Quay #30-01

Hong Leong Building

Singapore 048581

DTZ Debenham Tie Leung (SEA) Pte Ltd

(appointed by the Trustee)

100 Beach Road #35-00

Shaw Tower

Singapore 189702

2

OVERVIEW

The following overview is qualified in its entirety by, and should be read in conjunction with, the

full text of this Circular. Meanings of defined terms may be found in the Glossary on pages 33 to

38 of this Circular.

Any discrepancies in the tables included herein between the listed amounts and totals thereof are

due to rounding.

SUMMARY OF APPROVALS SOUGHT

The Manager seeks approval from unitholders of A-REIT (“Unitholders”) for the resolutions stated

below:

(1) Resolution 1: the proposed acquisition of One@Changi City (Ordinary Resolution); and

(2) Resolution 2: the proposed issuance of new Units at an issue price of S$2.223 per Unit as

partial consideration for the proposed acquisition of One@Changi City (Ordinary Resolution)

(which is conditional upon the passing of Resolution 1).

Unitholders should note that Resolution 2 relating to the proposed issuance of

Consideration Units is conditional upon Resolution 1 being passed. In the event that

Resolution 1 is not passed, the Manager will not proceed with Resolution 2.

RESOLUTION 1: THE PROPOSED ACQUISITION OF ONE@CHANGI CITY

The Proposed Acquisition of One@Changi City

On 9 December 2015, HSBC Institutional Trust Services (Singapore) Limited (as trustee of

A-REIT) entered into a conditional put and call option agreement (the “Option Agreement”) with

Ascendas Frasers Pte. Ltd. (the “Vendor”) in relation to the proposed acquisition (the “Proposed

Acquisition”) of the property located at 1 Changi Business Park Central 1, Singapore 486036 and

commonly known as One@Changi City, together with the Plant and Equipment1 therein

(collectively, the “Property”). The Vendor is a joint venture between Frasers Centrepoint Limited

(“FCL”) and Ascendas Pte Ltd (“APL”), where a wholly-owned subsidiary of FCL holds a 50.0%

interest in the Vendor and the remaining 50.0% interest is held by Ascendas Development Pte.

Ltd. (“ADPL”), which is wholly-owned by Ascendas Land (Singapore) Pte Ltd (“ALS”), a direct

wholly-owned subsidiary of APL. APL is a wholly-owned subsidiary of Ascendas-Singbridge Pte.

Ltd. (“ASB”).

Pursuant to the Option Agreement, the Trustee and the Vendor are required to enter into a sale

and purchase agreement for the Property (the “Purchase Agreement”) on the day the Call Option

(as defined herein) is exercised by the Trustee, or on the day the Put Option (as defined herein)

is exercised by the Vendor (as the case may be).

1 “Plant and Equipment” refers to the fixed plant and equipment (including, without limitation, all fixtures, lifts,

air-conditioning equipment and other plant and equipment necessary for the operation of the Property), if any,

located in or on or which otherwise exclusively relate to the Property or the operations of the Property and which

are owned by the Vendor in its capacity as owner of the Property.

3

Description of the Property

The Property is located in the heart of Changi Business Park and is easily accessible via the East

Coast Parkway Expressway, Pan Island Expressway and Tampines Expressway. The Property is

well-served by public transport, being in close proximity to the Singapore Expo mass rapid transit

(“MRT”) station which serves the East-West line and shall also serve the Downtown Line upon the

expected completion of the Downtown Line Phase 3 in 2017. The Property also benefits from its

proximity to Changi Airport.

The Property is the business park component of the mixed-use development known as Changi

City, which also has a hotel residence component (Capri by Fraser, Changi City) and a retail

component (Changi City Point).

The Property is a nine-storey, high quality multi-tenanted business park building, with contiguous

floor plates of 5,400 square metres (“sq m”) to 8,900 sq m per floor, being the largest of its kind

in Singapore. The Property has an occupancy rate of 97.9% as at 31 December 2015 with a total

of nine tenants. Anchor tenants of the Property include established financial institutions such as

Credit Suisse and J.P. Morgan.

The Property was completed in November 2012 and has been certified Green Mark Gold Plus by

the Building & Construction Authority of Singapore.

(See Appendix A of this Circular for further details.)

Valuation and Purchase Consideration

The Manager has commissioned an independent property valuer, Knight Frank Pte Ltd (“Knight

Frank”), and the Trustee has commissioned another independent property valuer, DTZ Debenham

Tie Leung (SEA) Pte Ltd (“DTZ”, and together with Knight Frank, the “Independent Valuers”), to

value the Property. The open market value of the Property as at 2 December 2015 is S$439.0

million and S$436.6 million as stated by Knight Frank and DTZ in their respective valuation

reports. The methods used by the Independent Valuers were the discounted cash flow method and

the capitalisation method.

The purchase consideration (the “Purchase Consideration”) payable to the Vendor in connection

with the Proposed Acquisition is S$420.0 million. If Resolution 2 relating to the proposed issuance

of Consideration Units is passed, approximately S$210.0 million (representing approximately

50.0% of the Purchase Consideration) will be satisfied by way of issuance of the Consideration

Units to the Vendor (or its nominee(s)) and the balance of the Purchase Consideration for the

amount of approximately S$210.0 million will be in cash. If Resolution 2 relating to the proposed

issuance of Consideration Units is not passed, the Purchase Consideration of S$420.0 million will

be paid to the Vendor in cash.

The Purchase Consideration was arrived at on a willing-buyer and willing-seller basis taking into

account the independent valuations of the Property set out above.

The Trustee has paid an option fee of S$10.0 million (the “Option Fee”) to the Vendor upon the

signing of the Option Agreement, which shall be applied towards part payment of the deposit to

be paid by the Trustee pursuant to the Purchase Agreement upon exercise of the option. The

Option Fee is refundable to the Trustee if the Call Option and the Put Option is not exercised (see

paragraph 2.3 of the Letter to Unitholders for further details). The balance of S$410.0 million will

be payable upon completion of the Proposed Acquisition (the “Completion”).

(See paragraph 2 of the Letter to Unitholders for further details.)

4

Total Acquisition Cost

The total cost of the Proposed Acquisition (the “Total Acquisition Cost”) is currently estimated

to be approximately S$438.9 million, comprising:

(i) the Purchase Consideration of S$420.0 million;

(ii) the acquisition fee (the “Acquisition Fee”) payable in Units to the Manager for the Proposed

Acquisition (the “Acquisition Fee Units”) of S$4.2 million1; and

(iii) the estimated stamp duty, professional and other fees and expenses of approximately

S$14.7 million incurred or to be incurred by A-REIT in connection with the Proposed

Acquisition.

Method of Financing

The Manager intends to finance the Total Acquisition Cost through:

(i) the issuance of new Units amounting to approximately S$210.0 million (the “Consideration

Units”) to the Vendor (or its nominee(s));

(ii) S$224.7 million out of the gross proceeds from the equity fund raising (the “Equity Fund

Raising”) launched on 9 December 2015 comprising (a) a private placement to institutional

and other investors and (b) a non-renounceable preferential offering of a total of

approximately S$344.9 million2 (the “EFR Proceeds”)3; and

(iii) the issuance of new Units of S$4.2 million as the Acquisition Fee.

(See paragraph 2.8 of the Letter to Unitholders for further details.)

Interested Person Transaction and Interested Party Transaction

As at 22 January 2016, being the latest practicable date prior to the printing of this Circular (the

“Latest Practicable Date”), APL, through ALS and the Manager, holds an aggregate interest in

438,598,700 Units, which is equivalent to approximately 17.1% of the total number of Units in

issue, and is therefore regarded as a “controlling Unitholder” of A-REIT under both the listing

manual of the SGX-ST (the “Listing Manual”) and the Property Funds Appendix. In addition, as

the Manager is an indirect wholly-owned subsidiary of APL, APL is therefore regarded as a

“controlling shareholder” of the Manager under both the Listing Manual and the Property Funds

Appendix.

1 As the Proposed Acquisition will constitute an “interested party transaction” under Appendix 6 of the Code on

Collective Investment Schemes (the “Property Funds Appendix”) issued by the Monetary Authority of Singapore

(“MAS”), the Acquisition Fee Units shall not be sold within one year from the date of issuance in accordance with

paragraph 5.7 of the Property Funds Appendix.

2 Please refer to, inter alia, the announcements dated 9 December 2015 and 15 January 2016 for details on the Equity

Fund Raising and the gross proceeds raised (collectively, the “EFR Announcements”).

3 Should the Proposed Acquisition not proceed, the EFR Proceeds will be deployed to fund future investments or pare

down debt.

5

As APL holds an indirect 50.0% interest in the Vendor, for the purposes of Chapter 9 of the Listing

Manual and Paragraph 5 of the Property Funds Appendix, the Vendor (being an associate of a

“controlling Unitholder” and a “controlling shareholder” of the Manager) is (for the purposes of the

Listing Manual) an “interested person” and (for the purposes of the Property Funds Appendix) an

“interested party” of A-REIT.

Therefore, the Proposed Acquisition will constitute an “interested person transaction” under

Chapter 9 of the Listing Manual as well as an “interested party transaction” under the Property

Funds Appendix, in respect of which the approval of Unitholders is required.

Given that the Purchase Consideration is S$420.0 million (which is 8.4% of both the latest audited

net tangible assets (“NTA”) and the net asset value (“NAV”) of A-REIT as at 31 March 2015), the

value of the Purchase Consideration exceeds 5.0% of the NTA and the NAV of A-REIT.

Accordingly, the Manager is seeking the approval of Unitholders by way of an Ordinary Resolution

of the Unitholders for the Proposed Acquisition.

(See paragraph 5.3.3 of the Letter to Unitholders for further details.)

Rationale for and Benefits of the Proposed Acquisition

The Manager believes that the Proposed Acquisition will bring the following key benefits to

Unitholders:

• The Proposed Acquisition is in line with A-REIT’s investment strategy

• Enables A-REIT to capitalise on the competitive strengths of the Property

• Complements and enhances A-REIT’s market share in Changi Business Park, as well as the

overall business and science park sector in Singapore

• Provides income diversification and potential upside, as well as increased exposure to high

quality tenants

RESOLUTION 2: THE PROPOSED ISSUANCE OF NEW UNITS AT AN ISSUE PRICE OF

S$2.223 PER UNIT AS PARTIAL CONSIDERATION FOR THE PROPOSED ACQUISITION OF

ONE@CHANGI CITY

Partial Payment for the Proposed Acquisition

If Resolution 2 relating to the proposed issuance of Consideration Units is passed, out of the

Purchase Consideration of S$420.0 million, approximately S$210.0 million (representing

approximately 50.0% of the Purchase Consideration) will be satisfied by way of issuance of the

Consideration Units to the Vendor (or its nominee(s)) and the balance of the Purchase

Consideration for the amount of approximately S$210.0 million will be in cash. If Resolution 2

relating to the proposed issuance of Consideration Units is not passed, the Purchase

Consideration of S$420.0 million will be paid to the Vendor in cash.

Given the inherent unpredictability of stock prices on any securities exchange, the volume

weighted average price for a Unit for the period of 10 business days immediately preceding the

date of Completion (the “10-day VWAP”) is likely to differ from the issue price under the Equity

Fund Raising as announced in the EFR Announcements. To avoid such an incongruity given that

the Consideration Units and the new Units under the Equity Fund Raising are to be issued for the

same purpose of partly funding the Total Acquisition Cost, the issue price of the Consideration

Units will be the same as the issue price of the new Units issued under the Private Placement (as

6

defined herein) (being S$2.223 per Unit, which had been determined in accordance with the

provisions of the Trust Deed and the Listing Manual and taking into account, inter alia, market

conditions).

Based on the issue price of S$2.223 per Consideration Unit, the total number of Consideration

Units will be 94,466,936 and will represent approximately 3.7% of the total number of Units in

issue as at the Latest Practicable Date.

The Vendor has nominated ALS (a wholly-owned subsidiary of APL) to receive the Consideration

Units and in return, the Vendor will receive S$210.0 million in cash from ALS. Based on the

unitholding of APL as at the Latest Practicable Date, following the issuance of the Consideration

Units, APL, through ALS and the Manager, will hold an aggregate interest in 533,065,636 Units,

which is equivalent to approximately 20.0% of the total number of Units in issue1.

The proposed issuance of the Consideration Units will not trigger any obligations of APL to make

a general offer under the Takeover Code as APL’s interest in A-REIT would increase from 17.1%

to 20.0%1.


Status of the Consideration Units

The Consideration Units will not be entitled to distributions by A-REIT for the period immediately

preceding the date of issue of the Consideration Units, and will only be entitled to receive

distributions by A-REIT from the date of their issue to the end of the semi-annual financial period

in which the Consideration Units are issued, as well as all distributions thereafter.

Save as set out above, the Consideration Units will, upon issue, rank pari passu in all respects

with the Units in issue on the day immediately preceding the date of issue of the Consideration

Units.

Requirement of Unitholders’ Approval for the Proposed Issuance of the Consideration

Units

The Manager is seeking Unitholders’ approval for the proposed issuance of the Consideration

Units pursuant to Rule 805(1) of the Listing Manual.

As APL holds an indirect 50.0% interest in the Vendor, the issuance of the Consideration Units to

the Vendor (or its nominee(s)) will constitute a placement to associated companies of Substantial

Unitholders (as defined herein). As at the Latest Practicable Date, APL has deemed interests of

(i) 17.1% in A-REIT and (ii) 100.0% in the Manager. Under Rule 812 of the Listing Manual, any

issue of Units must not be placed to a Substantial Unitholder unless Unitholders’ approval is

obtained.

The proposed issuance of the Consideration Units to the Vendor (or its nominee(s)) will constitute

an “interested person transaction” under Chapter 9 of the Listing Manual, in respect of which the

approval of Unitholders is required.

1 For the avoidance of doubt, this does not take into account the Acquisition Fee Units. Based on the illustrative issue

price of S$2.1748 per Unit (being the VWAP (as defined herein) for 10 business days immediately preceding the

Latest Practicable Date), a total of 1,931,212 Units will be issued to the Manager as payment of the Acquisition Fee

of S$4.2 million and APL’s aggregate interest in A-REIT would increase to approximately 20.1% of the total number

of Units in issue. The aforementioned is solely for illustrative purposes only and the actual issue price of the

Acquisition Fee Units will be determined based on the volume weighted average price (“VWAP”) for all trades done

on the SGX-ST for 10 business days immediately preceding the 30th calendar day after Completion.

7

Accordingly, the Manager is seeking the approval of Unitholders by way of an Ordinary Resolution

of the Unitholders for the proposed issuance of the Consideration Units to the Vendor (or its

nominee(s)).

The Vendor has nominated ALS (a wholly-owned subsidiary of APL) to receive the Consideration

Units and in return, the Vendor will receive S$210.0 million in cash from ALS.

(See paragraph 3.3 of the Letter to Unitholders for further details.)

UNITHOLDERS SHOULD NOTE THAT RESOLUTION 2 (THE PROPOSED ISSUANCE OF THE

CONSIDERATION UNITS) IS SUBJECT TO AND CONTINGENT UPON THE PASSING OF

RESOLUTION 1 (THE PROPOSED ACQUISITION).

Rationale for the Proposed Issuance of the Consideration Units

The proposed issuance of the Consideration Units to the Vendor (or its nominee(s)), which is

50.0% owned by APL, will enhance the alignment of the interests of APL with that of A-REIT and

its minority Unitholders. The Vendor has nominated ALS to receive the Consideration Units and

in return, the Vendor will receive S$210.0 million in cash from ALS. This also demonstrates APL’s

commitment to support A-REIT’s growth strategy and allows A-REIT to manage its capital

structure and create more debt headroom for future growth.

8

INDICATIVE TIMETABLE

The timetable for the events which are scheduled to take place after the EGM is indicative only

and is subject to change at the Manager’s absolute discretion. Any changes (including any

determination of the relevant dates) to the timetable below will be announced.

Event Date and Time

Last date and time for lodgement of Proxy

Forms

: 13 February 2016 at 3.00 p.m.

Date and time of the EGM : 16 February 2016 at 3.00 p.m.

If approval for the Proposed Acquisition is obtained at the EGM:

Target date for Completion : Not later than 31 March 2016 (or such

other date as may be agreed between the

Trustee and the Vendor)

9

LETTER TO UNITHOLDERS



Directors of the Manager

Mr Koh Soo Keong (Chairman and Independent Director)

Mr Miguel Ko (Vice-Chairman and Non-Executive Director)

Mr Manohar Khiatani (Non-Executive Director)

Mr Teo Eng Cheong (Non-Executive Director)

Mr Chan Pengee Adrian (Independent Director)

Mr Teo Choon Chye, Marc (Independent Director)

Mr Wong Yew Meng (Independent Director)

Ms Chong Chiet Ping (Independent Director)

Ms Lim Sau Hoong (Independent Director)

Mr Tan Ser Ping (Executive Director and Chief Executive Officer)

Registered Office

1 Fusionopolis Place

#10-10 Galaxis

Singapore 138522

29 January 2016

To: Unitholders of A-REIT

Dear Sir/Madam

1. SUMMARY OF APPROVALS SOUGHT

The Manager is convening the EGM to seek the approval from Unitholders by way of an

Ordinary Resolution1 in respect of:

(i) the Proposed Acquisition; and

(ii) the proposed issuance of the Consideration Units.

Unitholders should note that Resolution 2 relating to the proposed issuance of

Consideration Units is conditional upon Resolution 1 being passed. In the event that

Resolution 1 is not passed, the Manager will not proceed with Resolution 2.

2. THE PROPOSED ACQUISITION

2.1 Description of the Property

The Property is located in the heart of Changi Business Park and is easily accessible via the

East Coast Parkway Expressway, Pan Island Expressway and Tampines Expressway. The

Property is well-served by public transport, being in close proximity to the Singapore Expo

MRT station which serves the East-West line and shall also serve the Downtown Line upon

the expected completion of the Downtown Line Phase 3 in 2017. The Property also benefits

from its proximity to Changi Airport.

1 “Ordinary Resolution” means a resolution proposed and passed as such by a majority being greater than 50.0%

or more of the total number of votes cast for and against such resolution at a meeting of Unitholders convened in

accordance with the provisions of the Trust Deed.

10

The Property is the business park component of the mixed-use development known as

Changi City, which also has a hotel residence component (Capri by Fraser, Changi City) and

a retail component (Changi City Point).

The Property is a nine-storey, high quality multi-tenanted business park building, with

contiguous floor plates of 5,400 sq m to 8,900 sq m per floor, being the largest of its kind in

Singapore. The Property has an occupancy rate of 97.9% as at 31 December 2015 with a

total of nine tenants. Anchor tenants of the Property include established financial institutions

such as Credit Suisse and J.P. Morgan.

The Property was completed in November 2012 and has been certified Green Mark Gold

Plus by the Building & Construction Authority of Singapore.

(See Appendix A of this Circular for further details.)

2.2 Details of the Proposed Acquisition and the Independent Valuations

On 9 December 2015, the Trustee entered into the Option Agreement with the Vendor in

relation to the Proposed Acquisition. Pursuant to the Option Agreement, the Trustee and the

Vendor are required to enter into the Purchase Agreement on the day the Call Option is

exercised by the Trustee, or on the day the Put Option is exercised by the Vendor (as the

case may be).

The Vendor is a joint venture between FCL and APL, where a wholly-owned subsidiary of

FCL holds a 50.0% interest in the Vendor and the remaining 50.0% interest is held by ADPL,

which is wholly-owned by ALS, a direct wholly-owned subsidiary of APL. APL is a

wholly-owned subsidiary of ASB.

The Purchase Consideration payable to the Vendor in connection with the Proposed

Acquisition is S$420.0 million.

The Manager has commissioned an independent property valuer, Knight Frank, and the

Trustee has commissioned another independent property valuer, DTZ, to value the Property.

The open market value of the Property as at 2 December 2015 is S$439.0 million and

S$436.6 million as stated by Knight Frank and DTZ in their respective valuation reports. The

methods used by the Independent Valuers were the discounted cash flow method and the

capitalisation method.

The Purchase Consideration was arrived at on a willing-buyer and willing-seller basis taking

into account the independent valuations of the Property set out above.

The Trustee has paid an Option Fee of S$10.0 million to the Vendor upon the signing of the

Option Agreement, which shall be applied towards part payment of the deposit to be paid by

the Trustee pursuant to the Purchase Agreement upon exercise of the option. The Option Fee

is refundable to the Trustee if the Call Option and the Put Option is not exercised (see

paragraph 2.3 below for further details). The balance of S$410.0 million will be payable upon

Completion.

11

2.3 Principal Terms and Conditions of the Option Agreement

(i) Call Option and Put Option

Pursuant to the Option Agreement:

(a) in consideration of the Trustee’s payment of the Option Fee to the Vendor, the

Vendor granted to the Trustee a right (the “Call Option”) to require the Vendor to

enter into the Purchase Agreement with the Trustee for the acquisition of the

Property at the Purchase Consideration and on the terms of the Purchase

Agreement; and

(b) in consideration of the mutual covenants in the Option Agreement, the Trustee

granted to the Vendor a right (the “Put Option”) to require the Trustee to enter into

the Purchase Agreement with the Vendor for the acquisition of the Property at the

Purchase Consideration and on the terms of the Purchase Agreement.

(ii) Conditions Precedent

The principal terms of the Option Agreement include the following conditions precedent

(the “Conditions Precedent”), which are to be fulfilled before the Trustee can serve the

Call Option notice on the Vendor (or the Vendor can serve the Put Option notice on the

Trustee, as the case may be):

(a) the Unitholders’ approval being obtained for the acquisition of the Property (the

“Unitholders’ Acquisition Approval”); and

(b) JTC Corporation’s (“JTC”) written confirmation that it has no objections to the

execution and registration of the transfer instrument in favour of A-REIT in relation

to the Property (the “JTC Final Confirmation”).

(iii) Exercise of Call Option

The Trustee may exercise the Call Option by delivering to the Vendor the Call Option

notice before the expiry of the period commencing on the date on which the Trustee

notifies the Vendor that it has obtained the Unitholders’ Acquisition Approval or the date

on which the Vendor notifies the Trustee that it has obtained the JTC Final Confirmation,

whichever date is later (or such other date as the Trustee and the Vendor may mutually

agree in writing) and ending at 5.00 p.m. on the date falling five business days after the

date of such notification (the “Call Option Exercise Period”). The Trustee may not

serve the Call Option notice on the Vendor except during the Call Option Exercise

Period and unless all the Conditions Precedent have been fulfilled.

Upon the Trustee’s issuance and service of the Call Option notice in accordance with

the terms of the Option Agreement, both the Trustee and the Vendor shall be bound to

enter into the Purchase Agreement on the same date of such service.

(iv) Exercise of Put Option

The Vendor may exercise the Put Option by delivering to the Trustee the Put Option

notice before the expiry of the period commencing immediately after the expiry of the

Call Option Exercise Period and ending at 5.00 p.m. on the date falling two business

days thereafter (the “Put Option Exercise Period”).

12

The Vendor may not serve the Put Option notice on the Trustee:

(a) except during the Put Option Exercise Period and unless all the Conditions

Precedent have been fulfilled;

(b) if the Trustee has served the Call Option notice on the Vendor during the Call

Option Exercise Period; or

(c) if the Trustee has given notice to terminate the Option Agreement.

Upon the Vendor’s issuance and service of the Put Option notice, both the Trustee and

the Vendor shall be bound to enter into the Purchase Agreement on the same date of

such service.

(v) Application of Option Fee

The Vendor shall apply the Option Fee towards part payment of the deposit to be paid

by the Trustee pursuant to the Purchase Agreement. The Vendor shall refund the Option

Fee to the Trustee within seven business days after the date of expiry of the Put Option

Exercise Period if neither the Call Option nor the Put Option has been exercised by the

relevant party before the expiry of the Call Option Exercise Period or the Put Option

Exercise Period (as the case may be).

(vi) Termination of the Option Agreement

The Trustee shall be entitled to terminate the Option Agreement if:

(a) there is any material breach of warranty under the Option Agreement;

(b) there is any material damage of the Property or any part(s) thereof by fire or any

other causes;

(c) there is any compulsory acquisition or notice of compulsory acquisition (or

intended acquisition) by the government or any other competent authority affecting

the building in which the Property is comprised to any extent or measure or 5% or

more of the land area of the common property of the development of which the

Property forms part; or

(d) the replies to any of the Trustee’s legal requisitions to the local authorities reveal

any findings which materially adversely affect the Property or any part(s) thereof.

2.4 Principal Terms and Conditions of the Purchase Agreement

The principal terms of the Purchase Agreement include, among others, the following:

• In the event that the Unitholders’ approval for the proposed issuance of Consideration

Units is obtained prior to Completion, the Purchase Consideration shall be partly

satisfied by the issuance of approximately S$210.0 million worth of Consideration Units

to the Vendor (or its nominee(s)). In the event that the Unitholders’ approval for the

proposed issuance of Consideration Units is not obtained prior to Completion, the

Purchase Consideration of S$420.0 million (less the Option Fee and the Rectification

Works Security Sum (as defined herein)) shall be paid to the Vendor by way of cashier’s

order(s) or bank draft(s).

13

• The Trustee shall withhold an amount of S$82,000 (the “Rectification Works Security

Sum”) on Completion in relation to rectification works to be carried out by the Vendor

in respect of certain identified defects in the Property at its cost and expense within

three months after Completion.

• The Vendor shall fully indemnify the Trustee against any losses, damages, claims,

demands, proceedings, actions, costs, expenses, interest and penalties (the “JTC

Liabilities”) suffered or incurred by the Trustee arising from any claim, demand,

proceeding or action that may be made or instituted by JTC against the Trustee after

Completion in respect of the JTC Liabilities, to the extent that such JTC Liabilities

resulted from any breach by the Vendor of any term, covenant or condition in the JTC

lease and/or JTC’s in-principle written approval to the sale of the Property which existed

on or prior to Completion, or which occurred prior to Completion and was subsequently

discovered by JTC after Completion.

• The Vendor shall deliver to the Trustee on Completion vacant possession of such

part(s) of the Property which are not occupied by (i) the tenants under existing tenancy

agreements and new tenancy agreements entered into after the date of the Purchase

Agreement or (ii) the tenants holding over.

2.5 Property Management and Lease Management

Upon Completion, Ascendas Services Pte Ltd (“ASPL”) will provide property management

services in respect of the Property as the property manager of A-REIT and the Manager will

provide lease management services in respect of the Property.

(i) Property Management

Under the terms of the property management agreement entered into between the

Manager, the Trustee and ASPL (the “Property Management Agreement”), ASPL will

provide certain property management, marketing, project management and car park

management services relating to all properties of A-REIT located in Singapore with

effect from 1 October 2012. Upon Completion, the management of the Property will be

covered by the Property Management Agreement and all fees and reimbursements

payable to ASPL will be in accordance with the Property Management Agreement.

(ii) Lease Management

Under the terms of the lease management agreement entered into between the

Manager and the Trustee (the “Lease Management Agreement”), the Manager will

provide lease management services relating to all properties of A-REIT located in

Singapore and the People’s Republic of China with effect from 1 October 2012. Upon

Completion, the management of the Property will be covered by the Lease Management

Agreement and all fees and reimbursements payable to the Manager or its nominees

(as the Manager may direct) will be in accordance with the Lease Management

Agreement.

14

2.6 Other Related Agreements

In connection with the Proposed Acquisition and pursuant to the Purchase Agreement, the

Trustee will enter into a deed of ratification, accession and retirement to take over and

assume all of the Vendor’s rights and obligations as subsidiary proprietor of the Property

under the limited liability partnership agreement in respect of Changi City Carpark

Operations LLP (the “Carpark LLP”). The primary purpose of the Carpark LLP is limited to

the management and operation of the car park serving Changi City Point, Capri by Fraser,

Changi City and the Property, which is licensed to the Carpark LLP by the management

corporation of Changi City.

2.7 Total Acquisition Cost

The Total Acquisition Cost is currently estimated to be approximately S$438.9 million,

comprising:

(i) the Purchase Consideration of S$420.0 million;

(ii) the Acquisition Fee (payable by issuance of the Acquisition Fee Units to the Manager)

of S$4.2 million1; and



Acquisition.

2.8 Method of Financing

The Manager intends to finance the Total Acquisition Cost through:

(i) the issuance of the Consideration Units to the Vendor (or its nominee(s));

(ii) S$224.7 million out of the EFR Proceeds of a total of approximately S$344.9 million2

(see, inter alia, the EFR Announcements dated 9 December 2015 and 15 January 2016

for further details on the Equity Fund Raising and the EFR Proceeds); and

(iii) the issuance of the Acquisition Fee Units as the Acquisition Fee.

Gross proceeds of a total of approximately S$344.9 million have been raised from the Equity

Fund Raising, comprising (a) a private placement to institutional and other investors and (b)

a non-renounceable preferential offering. Subject to relevant laws and regulations, the

Manager intends to use the gross proceeds from the Equity Fund Raising in the following

manner:

(i) approximately S$224.7 million to partially fund the Total Acquisition Cost;

(ii) approximately S$82.0 million to partially fund the proposed acquisition of a logistics

property in Australia as announced on 24 December 2015 (the “Proposed Australian

Acquisition”) and the associated costs;

1 As the Proposed Acquisition will constitute an “interested party transaction” under the Property Funds Appendix, the

Acquisition Fee Units shall not be sold within one year from the date of issuance in accordance with Paragraph 5.7

of the Property Funds Appendix.


down debt.

15

(iii) approximately S$35.4 million to be used for funding debt repayment and future

acquisitions; and

(iv) approximately S$2.8 million to pay the estimated fees and expenses, including

professional fees and expenses, incurred or to be incurred by A-REIT in connection with

the Equity Fund Raising,

with the balance of the gross proceeds of the Equity Fund Raising, if any, to be used for

general corporate and/or working capital purposes.

Taking into consideration the Equity Fund Raising and assuming that the cash component of

the Total Acquisition Cost is fully funded by the Equity Fund Raising, the level of Aggregate

Leverage1 of A-REIT will decrease from 39.4% as at 30 November 20152 to 36.5%

immediately after the Proposed Acquisition3.

If Resolution 2 relating to the proposed issuance of Consideration Units is not passed, the

Purchase Consideration of S$420.0 million will be paid to the Vendor in cash. In such

circumstance, the Manager expects to finance the cash component of the Total Acquisition

Cost using a combination of the net proceeds from the Equity Fund Raising and debt

financing. The level of Aggregate Leverage of A-REIT will decrease from 39.4% as at 30

November 20152 to 38.6% immediately after the Proposed Acquisition3.

With effect from 1 January 2016, the Aggregate Leverage of A-REIT may not exceed 45.0%

of its Deposited Property.

2.9 Advice of the Independent Financial Adviser in relation to Resolution 1

The Manager has appointed the IFA to advise the independent directors of the Manager (the

“Independent Directors”) and the audit committee of the Manager (the “Audit Committee”)

in relation to the Proposed Acquisition. A copy of the letter from the IFA to the Independent

Directors (the “IFA Letter”), containing its advice in full, is set out in Appendix C of this

Circular and Unitholders are advised to read the IFA Letter carefully.

Having considered the factors and the assumptions set out in the IFA Letter, and subject to

the qualifications set out therein, the IFA is of the opinion that the Proposed Acquisition is

based on normal commercial terms and is not prejudicial to the interests of A-REIT and its

minority Unitholders.

The IFA is of the opinion that the Independent Directors can recommend that Unitholders

vote in favour of the resolution in connection with the Proposed Acquisition to be proposed

at the EGM.

1 “Aggregate Leverage” refers to the ratio of the value of borrowings (inclusive of proportionate share of borrowings

of jointly controlled entities) and deferred payments (if any) to the value of the Deposited Property. “Deposited

Property” refers to the gross assets of A-REIT, including all its authorised investments held or deemed to be held

upon the trust under the Trust Deed.

2 Based on the unaudited pro forma position of A-REIT.

3 For the avoidance of doubt, this does not take into account the Proposed Australian Acquisition.

16

3. THE PROPOSED ISSUANCE OF THE CONSIDERATION UNITS

3.1 Partial Payment for the Proposed Acquisition

If Resolution 2 relating to the proposed issuance of Consideration Units is passed, out of the

Purchase Consideration of S$420.0 million, approximately S$210.0 million (representing

approximately 50.0% of the Purchase Consideration) will be satisfied by way of issuance of

the Consideration Units to the Vendor (or its nominee(s)) and the balance of the Purchase

Consideration for the amount of approximately S$210.0 million will be in cash. If Resolution

2 relating to the proposed issuance of Consideration Units is not passed, the Purchase

Consideration of S$420.0 million will be paid to the Vendor in cash.

Given the inherent unpredictability of stock prices on any securities exchange, the 10-day

VWAP for a Unit immediately preceding the date of Completion is likely to differ from the

issue price under the Equity Fund Raising as announced in the EFR Announcements. To

avoid such an incongruity given that the Consideration Units and the new Units under the

Equity Fund Raising are to be issued for the same purpose of partly funding the Total

Acquisition Cost, the issue price of the Consideration Units will be the same as the issue

price for the Units issued under the Private Placement (being S$2.223 per Unit, which had

been determined in accordance with the provisions of the Trust Deed and the Listing Manual

and taking into account, inter alia, market conditions).

Pursuant to Clause 5.2.6 of the Trust Deed, as the Consideration Units are issued as partial

consideration for the Proposed Acquisition and which is in conjunction with the Private

Placement meant to partially finance the Proposed Acquisition, the Manager has the

discretion to determine that the issue price of the Consideration Units is to be the same as

the issue price for the Units issued under the Private Placement. In addition, the Manager

has decided that the issue price of the Consideration Units will be the same as the issue price

for the Units issued under the Private Placement as (a) the Vendor is desirous of certainty

with respect to the issue price of the Consideration Units and (b) this will put the Vendor in

a position that is on par with the incoming investors under the Private Placement.

The issue price of S$2.223 per Unit of the Consideration Units and the Units issued under

the Private Placement represents a discount of:

(i) 6.2% to the VWAP of S$2.3706 per Unit for trades in the Units done on the SGX-ST for

the full Market Day1 on 8 December 2015 (being the Market Day preceding the day on

which the placement agreement in connection with the Private Placement was signed)

and up to the time the placement agreement was signed on 9 December 2015; and

(ii) (for illustrative purposes only) 5.0% to the adjusted VWAP2 of S$2.3400 per Unit.

Based on the issue price of S$2.223 per Consideration Unit, the total number of

Consideration Units will be 94,466,936 and will represent approximately 3.7% of the total

number of Units in issue as at the Latest Practicable Date.

The Consideration Units shall be issued on the date of Completion (the “Completion Date”)

under a temporary stock counter from the existing A-REIT stock counter, such temporary

stock counter to be maintained for the period commencing from the date of issue of the

Consideration Units to the last day of “cum-distribution” trading for the existing Units, in

respect of the distribution period from 18 December 2015 to 31 March 2016 (or such other

period as the Manager may determine). After the last day of “cum-distribution” trading, both

1 “Market Day” refers to a day on which the SGX-ST is open for securities trading.

2 The adjusted VWAP is computed based on the VWAP of all trades in the Units on the SGX-ST on the full Market

Day on 8 December 2015 (being the Market Day preceding the day the placement agreement in connection with the

Private Placement was signed) and up to the time the placement agreement was signed on 9 December 2015 and

subtracting the Estimated Advanced Distribution (as defined herein).

17

the Consideration Units and the existing Units will be aggregated and traded under the

existing A-REIT stock counter on the Main Board of the SGX-ST. The Consideration Units will

not be entitled to participate in A-REIT’s distribution for the period immediately preceding the

date of issue of the Consideration Units.

The Vendor has nominated ALS to receive the Consideration Units and in return, the Vendor

will receive S$210.0 million in cash from ALS.

3.2 Status of the Consideration Units

The Consideration Units will not be entitled to distributions by A-REIT for the period

immediately preceding the date of issue of the Consideration Units, and will only be entitled

to receive distributions by A-REIT from the date of their issue to the end of the semi-annual

financial period in which the Consideration Units are issued, as well as all distributions

thereafter.

Save as set out above, the Consideration Units will, upon issue, rank pari passu in all

respects with the Units in issue on the day immediately preceding the date of issue of the

Consideration Units.

3.3 Requirement of Unitholders’ Approval for the Proposed Issuance of the Consideration

Units

The Manager is seeking Unitholders’ approval for the proposed issuance of the

Consideration Units pursuant to Rule 805(1) of the Listing Manual.

As APL holds an indirect 50.0% interest in the Vendor, the issuance of the Consideration

Units to the Vendor (or its nominee(s)) will constitute a placement to associated companies

of Substantial Unitholders. As at the Latest Practicable Date, APL has deemed interests of

(i) 17.1% in A-REIT and (ii) 100.0% in the Manager. Under Rule 812 of the Listing Manual,

any issue of Units must not be placed to a Substantial Unitholder unless Unitholders’

approval is obtained.

The proposed issuance of the Consideration Units to the Vendor (or its nominee(s)) will

constitute an “interested person transaction” under Chapter 9 of the Listing Manual, in

respect of which the approval of Unitholders is required.

Accordingly, the Manager is seeking the approval of Unitholders by way of an Ordinary

Resolution of the Unitholders for the proposed issuance of the Consideration Units to the

Vendor (or its nominee(s)).

The Vendor has nominated ALS (a wholly-owned subsidiary of APL) to receive the

Consideration Units and in return, the Vendor will receive S$210.0 million in cash from ALS.

Based on the unitholding of APL as at the Latest Practicable Date, following the issuance of

the Consideration Units, APL, through ALS and the Manager, will hold an aggregate interest

in 533,065,636 Units, which is equivalent to approximately 20.0% of the total number of Units

in issue1.

The proposed issuance of the Consideration Units will not trigger any obligations of APL to

make a general offer under the Takeover Code as APL’s interest in A-REIT would increase

from 17.1% to 20.0%1.

1 For the avoidance of doubt, this does not take into account the Acquisition Fee Units. Based on the illustrative issue

price of S$2.1748 per Unit (being the VWAP for 10 business days immediately preceding the Latest Practicable

Date), a total of 1,931,212 Units will be issued to the Manager as payment of the Acquisition Fee of S$4.2 million

and APL’s aggregate interest in A-REIT would increase to approximately 20.1% of the total number of Units in issue.

The aforementioned is solely for illustrative purposes only and the actual issue price of the Acquisition Fee Units will

be determined based on the VWAP for all trades done on the SGX-ST for 10 business days immediately preceding

the 30th calendar day after Completion.

18

3.4 Advice of the Independent Financial Adviser in relation to Resolution 2

The Manager has appointed the IFA to advise the Independent Directors and the Audit

Committee in relation to the proposed issuance of the Consideration Units. A copy of the IFA

Letter, containing its advice in full, is set out in Appendix C of this Circular and Unitholders

are advised to read the IFA Letter carefully.

Having considered the factors and the assumptions set out in the IFA Letter, and subject to

the qualifications set out therein, the IFA is of the opinion that the proposed issuance of the

Consideration Units is on normal commercial terms and is not prejudicial to the interests of

A-REIT and its minority Unitholders.

The IFA is of the opinion that the Independent Directors can recommend that Unitholders

vote in favour of the resolution in connection with the proposed issuance of the Consideration

Units to be proposed at the EGM.

4. RATIONALE FOR AND BENEFITS OF THE PROPOSED ACQUISITION AND THE

PROPOSED ISSUANCE OF THE CONSIDERATION UNITS

The Manager believes that the Proposed Acquisition and the proposed issuance of the

Consideration Units will bring the following key benefits to Unitholders:

4.1 The Proposed Acquisition is in line with A-REIT’s investment strategy

The Proposed Acquisition is in line with the Manager’s aims to deliver predictable

distributions and to enhance the value of A-REIT’s property portfolio over time through, inter

alia, selectively acquiring additional properties that meet the Manager’s investment criteria.

The Proposed Acquisition is in line with the Manager’s investment strategy, which includes

making value-adding investments comprising development as well as acquisition of income-

producing properties with strong underlying real estate fundamentals to deliver long-term

sustainable distributions and capital stability to Unitholders.

4.2 Enables A-REIT to capitalise on the competitive strengths of the Property

• Strategic location and good connectivity

The Property is strategically located in the heart of Changi Business Park in close

proximity to the Expo MRT station, which serves the East-West line. It benefits from its

proximity to Changi Airport. The Property is also easily accessible via the East Coast

Parkway Expressway, Pan Island Expressway and Tampines Expressway. Public

transport services and connectivity will be further enhanced when the Downtown Line

Phase 3 is completed, currently expected to be in 2017, where the Expo MRT station

will also serve the Downtown line.

The Property is located next to Changi City Point (a suburban retail mall) and Capri by

Fraser, Changi City (a hotel residence), with access to a wide variety of food and

beverage options, amenities, hotel and conference facilities located within walking

distance.

• Strengths of the Property

Properties with more than 50 years land lease tenure are rare given JTC’s policy to

shorten industrial land lease tenures. The Property is not subject to any anchor tenant

policy and sublet constraints imposed by JTC and thus, allows for more leasing

flexibility. In addition, upfront land premium for the remaining land lease term has been

fully paid.

Changi City is one of the two mixed-use developments with a business park, retail and

hotel component within Changi Business Park located next to the Expo MRT station.

19

4.3 Complements and enhances A-REIT’s market share in Changi Business Park, as well

as the overall business and science park sector in Singapore

The Proposed Acquisition will reinforce A-REIT’s presence and market share in Changi

Business Park as well as the overall business and science park sector. With the addition of

the Property, A-REIT will increase its total gross floor area in the business and science park

sector from 679,542 sq m to 750,700 sq m.

4.4 Provides income diversification and potential upside, as well as increased exposure to

high quality tenants

The Proposed Acquisition will benefit A-REIT and the Unitholders with further income

diversification arising from the enlarged tenant base. Following the Proposed Acquisition,

A-REIT will benefit from the addition of global financial institutions such as Credit Suisse and

J.P. Morgan into A-REIT’s tenant base. In addition, approximately 92.0% of the Property’s net

lettable area is approximately 14.0% below current market rent and there may be potential

for future rental growth.

4.5 Rationale for the proposed issuance of Consideration Units

The proposed issuance of the Consideration Units to the Vendor (or its nominee(s)), which

is 50.0% owned by APL, will enhance the alignment of the interests of APL with that of

A-REIT and its minority Unitholders. The Vendor has nominated ALS to receive the


This also demonstrates APL’s commitment to support A-REIT’s growth strategy and allows

A-REIT to manage its capital structure and create more debt headroom for future growth.

5. DETAILS AND FINANCIAL INFORMATION OF THE PROPOSED ACQUISITION

5.1 Pro Forma Financial Effects of the Proposed Acquisition

A-REIT adopts a consistent approach for the evaluation of investment opportunities.

Potential investments are evaluated on a consistent basis with a capital structure which

comprises 60% equity funding and 40% debt funding. This is to ensure that returns across

all investments are evaluated on a sustainable and constant capital structure. Capital

structure and gearing are managed at the A-REIT level and not on a transaction-basis.

The pro forma financial effects of the Proposed Acquisition on the distribution per Unit

(“DPU”) and NAV per Unit, and the pro forma capitalisation of A-REIT presented below are

strictly for illustrative purposes and were prepared based on the audited consolidated

financial statements of A-REIT (the “A-REIT Audited Financial Statements”) for the

financial year ended 31 March 2015 (“FY14/15”), taking into account the Total Acquisition

Cost, and assuming that:

(i) A-REIT had purchased, held and operated the Property for the whole of FY14/15;

(ii) S$263.3 million, or 60%, of the Total Acquisition Cost was satisfied by way of issue of

Units, with the remainder amount funded wholly by debt;

(iii) the average cost of debt was 2.70% (being the average cost of debt for the whole of

FY14/15);

(iv) the Units were issued at an illustrative price of S$2.223 per Unit; and

(v) in respect of the Enlarged Portfolio, the Manager had elected to receive 80.0% of its

base management fee in cash and 20.0% in Units.

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5.1.1 Pro Forma DPU

FOR ILLUSTRATIVE PURPOSES ONLY:

The pro forma financial effects of the Proposed Acquisition on A-REIT’s DPU for

FY14/15, as if the Proposed Acquisition was completed on 1 April 2014 and A-REIT

held and operated the Property through to 31 March 2015 are as follows:

Effects of

the Proposed Acquisition

Before the

Proposed

Acquisition

After the

Proposed

Acquisition

Net Income (S$’000) 462,727 488,439

Distributable Income (S$’000) 351,140 370,224

Issued Units (’000) 2,405,707(1) 2,525,253(2)

DPU (cents) 14.600 14.667

Notes:

(1) Number of Units issued as at 31 March 2015.

(2) Includes Consideration Units issuable to the Vendor (or its nominee(s)), new Units issuable as

payment of the Acquisition Fee and 20% of base management fee payable to the Manager and

additional Units issued to fund 60% of the Total Acquisition Cost at an illustrative price of S$2.223 per

new Unit (purely for illustrative purposes only).

5.1.2 Pro Forma NAV


The pro forma financial effects of the Proposed Acquisition on A-REIT’s NAV per Unit

as at 31 March 2015, as if the Proposed Acquisition was completed on 31 March 2015

are as follows:

Effects of


Before the

Proposed

Acquisition

After the

Proposed

Acquisition

NAV (S$’000) 5,013,590 5,276,930

Issued Units (’000) 2,405,707(1) 2,524,253(2)

NAV per Unit (S$) 2.08 2.09

Notes:




additional Units issued to fund 60% of the Total Acquisition Cost at an illustrative price of S$2.223 per


21

5.1.3 Pro Forma Capitalisation


The pro forma capitalisation of A-REIT as at 31 March 2015, as if the Proposed

Acquisition was completed on 31 March 2015, is as follows:

Effects of


Before the

Acquisition

After the

Acquisition

Current

Unsecured loans and borrowings (S$’000) 285,525 285,525

Non-Current

Unsecured loans and borrowings (S$’000) 2,086,444 2,262,004(1)

Secured loans and borrowings (S$’000) 366,024 366,024

Total loans and borrowings (S$’000) 2,737,993 2,913,553

Unitholders’ funds (S$’000) 5,013,590 5,276,930(2)

Total Capitalisation (S$’000) 7,751,583 8,190,483

Notes:

(1) Includes S$175.6 million of unsecured loan drawn to fund 40% of the Total Acquisition Cost (purely

for illustrative purposes only).

(2) Includes S$263.3 million of additional unitholders’ funds (or approximately 118.5 million new Units

issuable at an illustrative price of S$2.223 per new Unit) issued to fund 60% of the Total Acquisition

Cost (purely for illustrative purposes only).

5.2 Pro Forma Financial Effects of the Proposed Acquisition assuming that the Proposed

Acquisition is Fully Funded by Equity

Given that it is intended for the Proposed Acquisition to be funded by the EFR Proceeds and

the issuance of Consideration Units, the pro forma financial effects of the Proposed

Acquisition on the DPU and NAV per Unit and the pro forma capitalisation of A-REIT based

on the Proposed Acquisition being fully funded by equity (the “Equity Funded Method”) are

also presented below. These are strictly for illustrative purposes and were prepared based

on the A-REIT Audited Financial Statements, taking into account the Total Acquisition Cost,

and assuming that:


(ii) the Total Acquisition Cost of S$438.9 million was fully funded by way of issue of Units;

(iii) the Units were issued at an illustrative price of S$2.223 per Unit; and

(iv) in respect of the Enlarged Portfolio, the Manager had elected to receive 80.0% of its


22

5.2.1 Pro Forma DPU (Based on the Equity Funded Method)


Based on the Equity Funded Method, the pro forma financial effects of the Proposed

Acquisition on A-REIT’s DPU for FY14/15 as if the Proposed Acquisition was

completed on 1 April 2014 and A-REIT held and operated the Property through to

31 March 2015 are as follows:

Effects of the

Proposed Acquisition

Before the

Proposed

Acquisition

After the

Proposed

Acquisition

Net Income (S$’000) 462,727 488,439


Issued Units (’000) 2,405,707(1) 2,603,227(2)

DPU (cents) 14.600 14.404

Notes:




additional Units issued to fully fund the Total Acquisition Cost at an illustrative price of S$2.223 per


5.2.2 Pro Forma NAV (Based on the Equity Funded Method)



Acquisition on A-REIT’s NAV per Unit as at 31 March 2015, as if the Proposed

Acquisition was completed on 31 March 2015 are as follows:

Effects of the


Before the

Proposed

Acquisition

After the

Proposed

Acquisition

NAV (S$’000) 5,013,590 5,452,490

Issued Units (’000) 2,405,707(1) 2,603,227(2)


Notes:






23

5.2.3 Pro Forma Capitalisation (Based on the Equity Funded Method)


Based on the Equity Funded Method, the pro forma capitalisation of A-REIT as at

31 March 2015, as if the Proposed Acquisition was completed on 31 March 2015, is as

follows:

Effects of the


Before the

Proposed

Acquisition

After the

Proposed

Acquisition

Current

Unsecured loans and borrowings (S$’000) 285,525 285,525

Non-Current

Unsecured loans and borrowings (S$’000) 2,086,444 2,086,444



Unitholders’ funds (S$’000) 5,013,590 5,452,490

Total Capitalisation (S$’000) 7,751,583 8,190,483(1)

Note:


issuable at an illustrative price of S$2.223 per new Unit) issued to fully fund the Total Acquisition Cost

(purely for illustrative purposes only).

5.3 Requirement of Unitholders’ Approval

5.3.1 Major Transaction

Chapter 10 of the Listing Manual governs the acquisition or divestment of assets,

including options to acquire or dispose of assets, by A-REIT. Such transactions are

classified into the following categories:

(a) non-discloseable transactions;

(b) discloseable transactions;

(c) major transactions; and

(d) very substantial acquisitions or reverse takeovers.

A transaction by A-REIT may fall into any of the categories set out above depending

on the size of the relative figures computed on the following bases of comparison:

(i) the NAV of the assets to be disposed of, compared with A-REIT’s NAV;

(ii) the net profits attributable to the assets acquired, compared with A-REIT’s net

profits;

24

(iii) the aggregate value of the consideration given, compared with A-REIT’s market

capitalisation; and

(iv) the number of Units issued by A-REIT as consideration for an acquisition,

compared with the number of Units previously in issue.

Where any of the relative figures computed on the bases set out above exceeds

20.0%, the transaction is classified as a major transaction. The Listing Manual

requires that a major transaction involving A-REIT be made conditional upon approval

by Unitholders in a general meeting. However, the approval of Unitholders is not

required in the case of an acquisition of profitable assets if only sub-paragraph 5.3.1(ii)

exceeds the relevant 20.0% threshold.

5.3.2 Relative Figures computed on the Bases set out in Rule 1006

The relative figures for the Proposed Acquisition using the applicable bases of

comparison described in sub-paragraph 5.3.1 above (as set out in the announcement

dated 9 December 2015 in relation to the Proposed Acquisition) are set out in the table

below.

Percentage

Rule 1006(b)

Net profits attributable to the assets acquired compared to

A-REIT’s net profits

6.0%(1)

Rule 1006(c)

Aggregate value of consideration to be given compared with

A-REIT’s market capitalisation

7.4%(2)

Rule 1006(d)

Number of units to be issued by A-REIT as consideration for

an acquisition compared with the number of units previously in

issue

3.9%(3)

Notes:

(1) Based on A-REIT’s annualised unaudited financial accounts for the financial period from 1 April 2015

to 30 September 2015.

(2) This figure is based on A-REIT’s volume weighted average price of S$2.3706 per Unit on 8 December

2015, being the market day immediately prior to the entry into of the Option Agreement.

(3) This figure is based on the issue price of S$2.223 per Consideration Unit and the number of Units in

issue as at 8 December 2015, being the day immediately prior to the entry into of the Option

Agreement.

The Manager is of the view that the Proposed Acquisition is in the ordinary course of

A-REIT’s business as the Proposed Acquisition is within A-REIT’s investment policy

and does not change A-REIT’s risk profile. As such, the Proposed Acquisition should

therefore not be subject to Chapter 10 of the Listing Manual. However, as the

Proposed Acquisition constitutes an “interested person transaction” under Chapter 9

of the Listing Manual and an “interested party transaction” under the Property Funds

Appendix which value exceeds the relevant thresholds under the Listing Manual and

the Property Funds Appendix, the Proposed Acquisition will still be subject to the

specific approval of Unitholders.

25

5.3.3 Interested Person Transaction and Interested Party Transaction

Under Chapter 9 of the Listing Manual, where A-REIT proposes to enter into a

transaction with an interested person and the value of the transaction (either in itself

or when aggregated with the value of other transactions, each of a value equal to or

greater than S$100,000, with the same interested person during the same financial

year) is equal to or exceeds 5.0% of A-REIT’s latest audited NTA, Unitholders’

approval is required in respect of the transaction. Based on the A-REIT Audited

Financial Statements, the NTA of A-REIT was S$5,013.6 million as at 31 March 2015.

Accordingly, if the value of a transaction which is proposed to be entered into in the

current financial year by A-REIT with an interested person is, either in itself or in

aggregation with all other earlier transactions (each of a value equal to or greater than

S$100,000) entered into with the same interested person during the current financial

year, equal to or in excess of S$250.6 million, such a transaction would be subject to

Unitholders’ approval.

Paragraph 5 of the Property Funds Appendix also imposes a requirement for

Unitholders’ approval for an interested party transaction by A-REIT whose value

exceeds 5.0% of A-REIT’s latest audited NAV. Based on the A-REIT Audited Financial

Statements, the NAV of A-REIT was S$5,013.6 million as at 31 March 2015.

Accordingly, if the value of a transaction which is proposed to be entered into by

A-REIT with an interested party is equal to or greater than S$250.6 million, such a

transaction would be subject to Unitholders’ approval.

Given that the Purchase Consideration is 8.4% of both the NTA of A-REIT and the NAV

of A-REIT as at 31 March 2015, the value of the Proposed Acquisition exceeds the said

thresholds.

As at the Latest Practicable Date, APL, through ALS and the Manager, holds an

aggregate interest in 438,598,700 Units, which is equivalent to approximately 17.1%

of the total number of Units in issue, and is therefore regarded as a “controlling

Unitholder” of A-REIT under both the Listing Manual and the Property Funds Appendix.

In addition, as the Manager is an indirect wholly-owned subsidiary of APL, APL is

therefore regarded as a “controlling shareholder” of the Manager under both the

Listing Manual and the Property Funds Appendix.

As APL holds an indirect 50.0% interest in the Vendor, for the purposes of Chapter 9

of the Listing Manual and Paragraph 5 of the Property Funds Appendix, the Vendor

(being an associate of a “controlling Unitholder” and a “controlling shareholder” of the

Manager) is (for the purposes of the Listing Manual) an “interested person” and (for the

purposes of the Property Funds Appendix) an “interested party” of A-REIT.

Therefore, the Proposed Acquisition will constitute an “interested person transaction”

under Chapter 9 of the Listing Manual as well as an “interested party transaction”

under the Property Funds Appendix, in respect of which the approval of Unitholders is

required.

Details of the interested person transactions entered into between A-REIT and entities

within Temasek Holdings (Private) Limited (“THPL”), JTC, APL and their respective

subsidiaries and associates, during the course of the current financial year up to the

Latest Practicable Date (“Existing Interested Person Transactions”), which are the

subject of aggregation pursuant to Rule 906 of the Listing Manual, may be found in

Appendix D of this Circular.

26

5.4 Interests of Directors and Substantial Unitholders

As at the Latest Practicable Date, certain director(s) of the Manager collectively hold an

aggregate direct and indirect interest in 26,000 Units. Further details of the interests in Units

of Directors and Substantial Unitholders1 are set below.

Mr Koh Soo Keong is the Chairman and an Independent Director of the Manager. Mr Miguel

Ko is the Vice-Chairman and a Non-Executive Director of the Manager and ASB’s Group

CEO. Mr Manohar Khiatani, a Non-Executive Director of the Manager, is ASB’s Deputy Group

CEO and a Director of APL and certain other companies within the APL group of companies.

Mr Teo Eng Cheong is a Non-Executive Director of the Manager. Mr Teo Eng Cheong

(previously an Independent Director of the Manager) was re-designated as a Non-Executive

Director of the Manager with effect from 1 January 2016, upon his appointment as CEO

(International) of Surbana Jurong Private Limited (a related corporation of the Manager). Mr

Chan Pengee Adrian is an Independent Director of the Manager. Mr Teo Choon Chye, Marc

is an Independent Director of the Manager. Mr Wong Yew Meng is an Independent Director

of the Manager. Ms Chong Chiet Ping is an Independent Director of the Manager. Ms Lim Sau

Hoong is an Independent Director of the Manager. Mr Tan Ser Ping is the Chief Executive

Officer and an Executive Director of the Manager and a Director of Ascendas Land

International Pte Ltd and Ascendas Investment Pte Ltd (each, a wholly-owned subsidiary of

APL).

Based on the Register of Directors’ Unitholdings maintained by the Manager and save as

disclosed in the table below, none of the Directors currently holds a direct or deemed interest

in the Units as at the Latest Practicable Date:

Name of Directors

Direct Interest Deemed Interest Total No.

of Units

held %(1)

No. of

Units %(1)

No. of

Units %(1)

Mr Koh Soo Keong – – – – – –

Mr Miguel Ko – – – – – –

Mr Manohar Khiatani – – – – – –

Mr Teo Eng Cheong – – – – – –

Mr Chan Pengee Adrian – – – – – –

Mr Teo Choon Chye,

Marc 26,000 0.001 – – 26,000 0.001

Mr Wong Yew Meng – – – – – –

Ms Chong Chiet Ping – – – – – –

Ms Lim Sau Hoong – – – – – –

Mr Tan Ser Ping – – – – – –

Note:

(1) The percentage is based on 2,569,384,693 Units in issue as at the Latest Practicable Date.

1 “Substantial Unitholders” refers to a person with an interest in Units constituting not less than 5.0% of all Units in

issue.

27

Based on the information available to the Manager, the Substantial Unitholders of A-REIT

and their interests in the Units as at the Latest Practicable Date are as follows:

Name of

Substantial

Unitholders

Direct Interest Deemed Interest Total No.

of Units

held %(1)

No. of

Units %(1)

No. of

Units %(1)

Ascendas Land

(Singapore) Pte Ltd 381,700,400 14.9 – – 381,700,400 14.9

Ascendas Pte Ltd(2) – – 438,598,700 17.1 438,598,700 17.1

Ascendas-

Singbridge

Pte. Ltd.(2) – – 438,598,700 17.1 438,598,700 17.1

JTC Corporation(2) – – 438,598,700 17.1 438,598,700 17.1

Temasek Holdings

(Private) Limited(3) – – 456,877,900 17.8 456,877,900 17.8

Notes:

(1) The percentage is based on 2,569,384,693 Units in issue as at the Latest Practicable Date.

(2) APL, ASB and JTC are deemed to be interested in the Units held by ALS and the Manager.

(3) THPL is deemed to be interested in the Units held by ALS, the Manager, DBS Bank Ltd. and E M Services

Pte. Ltd.

Save as disclosed above and based on information available to the Manager as at the Latest

Practicable Date, none of the Directors or the Substantial Unitholders have an interest, direct

or indirect, in the Proposed Acquisition.

5.5 Directors’ Service Contracts

No person is proposed to be appointed as a director of the Manager in connection with the

Proposed Acquisition or any other transactions contemplated in relation to the Proposed

Acquisition.

6. RECOMMENDATIONS

6.1 On the Proposed Acquisition

Based on the opinion of the IFA (as set out in the IFA Letter in Appendix C of this Circular)

and the rationale for the Proposed Acquisition as set out in paragraph 4 above, the

Independent Directors and the Audit Committee believe that the Proposed Acquisition is

based on normal commercial terms and would not be prejudicial to the interests of A-REIT

and its minority Unitholders.

Accordingly, the Independent Directors recommend that Unitholders vote at the EGM in

favour of the resolution to approve the Proposed Acquisition.

6.2 On the Proposed Issuance of the Consideration Units

Based on the opinion of the IFA (as set out in the IFA Letter in Appendix C of this Circular)

and the rationale for the proposed issuance of the Consideration Units as set out in

paragraph 4 above, the Independent Directors and the Audit Committee believe that the

proposed issuance of the Consideration Units is on normal commercial terms and would not

be prejudicial to the interests of A-REIT and its minority Unitholders.

28

Accordingly, the Independent Directors recommend that Unitholders vote at the EGM in

favour of the resolution to approve the proposed issuance of the Consideration Units.

7. EXTRAORDINARY GENERAL MEETING

The EGM will be held on Tuesday, 16 February 2016 at 3.00 p.m. at Aperia, 10 Kallang

Avenue, Tower 1, Level 3 Rose Room, Singapore 339510, for the purpose of considering

and, if thought fit, passing with or without modification, the resolutions set out in the Notice

of EGM, which is set out on pages E-1 to E-2 of this Circular. The purpose of this Circular

is to provide Unitholders with relevant information about the resolutions. Approval by way of

an Ordinary Resolution is required in respect of the Proposed Acquisition and the proposed

issuance of the Consideration Units.

A Depositor shall not be regarded as a Unitholder entitled to attend the EGM and to speak

and vote thereat unless he is shown to have Units entered against his name in the Depository

Register, as certified by The Central Depository (Pte) Limited (“CDP”) as at 72 hours before

the time fixed for the EGM.

Unitholders should note that Resolution 2 (the proposed issuance of the

Consideration Units) is subject to and contingent upon Resolution 1 (the Proposed

Acquisition). In the event that A-REIT fails to obtain Unitholders’ approval for

Resolution 1 (the Proposed Acquisition), A-REIT will not proceed with Resolution 2

(the proposed issuance of the Consideration Units).

8. ABSTENTIONS FROM VOTING

Under Rule 919 of the Listing Manual, where a meeting is held to obtain Unitholders’

approval, the interested person and any associate of the interested person must not vote on

the resolutions, nor accept appointments as proxies, unless specific instructions as to voting

are given.

As at the Latest Practicable Date, APL, through ALS and the Manager has a deemed interest

in 438,598,700 Units, which comprises approximately 17.1% of the total number of Units in

issue.

As at the Latest Practicable Date, THPL has an aggregate deemed interest in 456,877,900

Units, which includes its deemed interest through APL, comprising approximately 17.8% of

the total number of Units in issue.

(i) Resolution 1: the Proposed Acquisition

Given that the Property will be acquired from an associate of APL, THPL, APL and their

associates will abstain from voting on Resolution 1.

(ii) Resolution 2: the Proposed Issuance of the Consideration Units

Given that the Consideration Units will be issued to the Vendor (or its nominees(s)),

which is an associate of APL, THPL, APL and their associates will abstain from voting

on Resolution 2.

29

9. ACTION TO BE TAKEN BY UNITHOLDERS

Unitholders will find enclosed in this Circular the Notice of EGM and a Proxy Form.

If a Unitholder is unable to attend the EGM and wishes to appoint a proxy to attend and vote

on his behalf, he should complete, sign and return the enclosed Proxy Form in accordance

with the instructions printed thereon as soon as possible and, in any event, so as to reach

the Unit Registrar’s office at Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles

Place #32-01, Singapore Land Tower, Singapore 048623, not later than 13 February 2016 at

3.00 p.m., being 72 hours before the time fixed for the EGM. The completion and return of

the Proxy Form by a Unitholder will not prevent him from attending and voting in person at

the EGM if he so wishes.

Persons who have an interest in the approval of the resolutions must decline to accept

appointment as proxies, unless the Unitholder concerned has specific instructions in his

Proxy Form as to the manner in which his votes are to be cast in respect of such resolution.

If a Unitholder (being an independent Unitholder) wishes to appoint Mr Miguel Ko,

Mr Manohar Khiatani, Mr Teo Eng Cheong or Mr Tan Ser Ping as his/her proxy/proxies for the

EGM, he/she should give specific instructions in his/her Proxy Form as to the manner in

which his/her vote is to be cast in respect of the resolutions.

10. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors collectively and individually accept full responsibility for the accuracy of the

information given in this Circular and confirm after making all reasonable enquiries that, to

the best of their knowledge and belief, this Circular constitutes full and true disclosure of all

material facts about the Proposed Acquisition, the Consideration Units, A-REIT and its

subsidiaries, and the Directors are not aware of any facts the omission of which would make

any statement in this Circular misleading. Where information in this Circular has been

extracted from published or otherwise publicly available sources or obtained from a named

source, the sole responsibility of the Directors has been to ensure that such information has

been accurately and correctly extracted from those sources and/or reproduced in this

Circular in its proper form and context.

11. CONSENTS

Each of the IFA (being Hong Leong Finance Limited) and the Independent Valuers (being

Knight Frank and DTZ) has given and has not withdrawn its written consent to the issue of

this Circular with the inclusion of its name and, respectively, the IFA Letter, the valuation

certificates and all references thereto, in the form and context in which they are included in

this Circular.

30

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours

at the registered office of the Manager1 at 1 Fusionopolis Place, #10-10 Galaxis, Singapore

138522 from the date of this Circular up to and including the date falling three months after

the date of this Circular:

(i) the Option Agreement (which contains the form of the Purchase Agreement);

(ii) the IFA Letter;

(iii) the independent valuation report on the Property issued by Knight Frank;

(iv) the independent valuation report on the Property issued by DTZ;

(v) the A-REIT Audited Financial Statements;

(vi) the written consents of each of the IFA and the Independent Valuers; and

(vii) the Trust Deed.

Yours faithfully

Ascendas Funds Management (S) Limited

(as manager of Ascendas Real Estate Investment Trust)

(Company Registration No. 200201987K)

Mr Koh Soo Keong

Chairman and Independent Director

1 Prior appointment with the Manager will be appreciated.

31

IMPORTANT NOTICE

The value of Units and the income derived from them may fall as well as rise. Units are not

obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in

Units is subject to investment risks, including the possible loss of the principal amount invested.

Investors have no right to request the Manager to redeem or purchase their Units for so long as

the Units are listed on the SGX-ST. It is intended that Unitholders may only deal in their Units

through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid

market for the Units.

The past performance of A-REIT is not indicative of the future performance of A-REIT. Similarly,

the past performance of the Manager is not indicative of the future performance of the Manager.

This Circular may contain forward-looking statements that involve assumptions, risks and

uncertainties. Actual future performance, outcomes and results may differ materially from those

expressed in forward-looking statements as a result of a number of risks, uncertainties and

assumptions. Representative examples of these factors include (without limitation) general

industry and economic conditions, interest rate trends, cost of capital and capital availability,

competition from other developments or companies, shifts in expected levels of occupancy rate,

property rental income, charge out collections, changes in operating expenses (including

employee wages, benefits and training costs), governmental and public policy changes and the

continued availability of financing in the amounts and the terms necessary to support future

business. You are cautioned not to place undue reliance on these forward-looking statements,

which are based on the Manager’s current view on future events.

If you have sold or transferred all your Units, you should immediately forward this Circular,

together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form, to

the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or

transfer was effected for onward transmission to the purchaser or transferee.

32

GLOSSARY

In this Circular, the following definitions apply throughout unless otherwise stated:

% : Per centum or percentage

10-day VWAP : VWAP for the period of 10 business days

Acquisition Fee : The acquisition fee for the Proposed Acquisition which the

Manager will be entitled to receive from A-REIT upon

Completion

Acquisition Fee Units : The Units to be issued to the Manager as payment of the

Acquisition Fee

ADPL : Ascendas Development Pte. Ltd.

Aggregate Leverage : The ratio of the value of borrowings (inclusive of proportionate

share of borrowings of jointly controlled entities) and deferred

payments (if any) to the value of the Deposited Property

ALS : Ascendas Land (Singapore) Pte Ltd

APL : Ascendas Pte Ltd

ASB : Ascendas-Singbridge Pte. Ltd.

ASPL : Ascendas Services Pte Ltd

A-REIT : Ascendas Real Estate Investment Trust

A-REIT Audited

Financial Statements

: The audited consolidated financial statements of A-REIT for

the financial year ended 31 March 2015

Audit Committee : The audit committee of the Manager

Call Option : The Trustee’s right to require the Vendor to enter into the

Purchase Agreement with the Trustee for the acquisition of the

Property at the Purchase Consideration and on the terms of

the Purchase Agreement

Call Option

Exercise Period

: The period commencing on the date on which the Trustee

notifies the Vendor that it has obtained the Unitholders’

Acquisition Approval or the date on which the Vendor notifies

the Trustee that it has obtained the JTC Final Confirmation,

whichever date is later (or such other date as the Trustee and

the Vendor may mutually agree in writing) and ending at 5.00

p.m. on the date falling five business days after the date of

such notification

Carpark LLP : Changi City Carpark Operations LLP

CDP : The Central Depository (Pte) Limited

33

Circular : This circular to Unitholders dated 29 January 2016

Completion : The completion of the Proposed Acquisition

Completion Date : The date of Completion

Conditions Precedent : The conditions precedent set out in the Option Agreement

Consideration Units : The 94,466,936 new Units to be issued to the Vendor (or its

nominee(s))

Deposited Property : The gross assets of A-REIT, including all its authorised

investments held or deemed to be held upon the trust under

the Trust Deed

DPU : Distribution per Unit

DTZ : DTZ Debenham Tie Leung (SEA) Pte Ltd

EFR Announcements : The announcements dated 9 December 2015 and 15 January

2016 in relation to the Equity Fund Raising

EFR Proceeds : Gross proceeds from the Equity Fund Raising, being

approximately S$344.9 million

EGM : The extraordinary general meeting of Unitholders to be held

on 16 February 2016 at 3.00 p.m. at Aperia, 10 Kallang

Avenue, Tower 1, Level 3 Rose Room, Singapore 339510, to

approve the matters set out in the Notice of Extraordinary

General Meeting on pages E-1 to E-2 of this Circular

Enlarged Portfolio : The Existing Portfolio and the Property (which, for the

avoidance of doubt, does not include the logistics property

under the Proposed Australian Acquisition)

Equity Fund Raising : The equity fund raising comprising a private placement to

institutional and other investors and a non-renounceable

preferential offering launched on 9 December 2015

Estimated Advanced

Distribution

: The distribution of the distributable income of A-REIT for the

period from 1 October 2015 to 17 December 2015 of an

estimated amount of approximately 3.060 cents per Unit

(based on the Manager’s estimation as at 9 December 2015)

Existing Interested

Person Transactions

: The interested person transactions entered into between

A-REIT and THPL, JTC, APL and their respective subsidiaries

and associates, during the course of the current financial year

up to the Latest Practicable Date

Existing Portfolio : The portfolio of properties held by A-REIT as at the Latest

Practicable Date

FCL : Frasers Centrepoint Limited

34

FY14/15 : The financial year ended 31 March 2015

IFA : Hong Leong Finance Limited

IFA Letter : The letter from the IFA to the Independent Directors and the

Audit Committee of the Manager containing its advice as set

out in Appendix C of this Circular

Independent Directors : The independent directors of the Manager

Independent Valuers : Knight Frank and DTZ

JTC : JTC Corporation

JTC Final Confirmation : JTC’s written confirmation that it has no objections to the

execution and registration of the transfer instrument in favour

of A-REIT in relation to the Property

JTC Liabilities : Any losses, damages, claims, demands, proceedings,

actions, costs, expenses, interest and penalties suffered or

incurred by the Trustee arising from any claim, demand,

proceeding or action that may be made or instituted by JTC

against the Trustee after Completion

Knight Frank : Knight Frank Pte Ltd

Latest Practicable Date : 22 January 2016, being the latest practicable date prior to the

printing of this Circular

Lease Management

Agreement

: The lease management agreement entered into between the

Manager and the Trustee pursuant to which the Manager will

provide lease management services relating to all properties

of A-REIT located in Singapore and the People’s Republic of

China with effect from 1 October 2012

Listing Manual : The listing manual of the SGX-ST

Manager : Ascendas Funds Management (S) Limited, in its capacity as

manager of A-REIT

Market Day : A day on which the SGX-ST is open for trading in securities

MAS : Monetary Authority of Singapore

MRT : Mass Rapid Transit

NAV : Net asset value

NTA : Net tangible assets

Option Agreement : The conditional put and call option agreement dated

9 December 2015 entered into between the Trustee and the

Vendor

35

Option Fee : The option fee of S$10.0 million which was paid to the Vendor

upon signing of the Option Agreement on 9 December 2015

Ordinary Resolution : A resolution proposed and passed as such by a majority being

greater than 50.0% or more of the total number of votes cast

for and against such resolution at a meeting of Unitholders

convened in accordance with the provisions of the Trust Deed

Plant and Equipment : The fixed plant and equipment (including, without limitation,

all fixtures, lifts, air-conditioning equipment and other plant

and equipment necessary for the operation of the Property), if

any, located in or on or which otherwise exclusively relate to

the Property or the operations of the Property and which are

owned by the Vendor in its capacity as owner of the Property

Private Placement : The issue of 90,000,000 new Units on 18 December 2015

which raised gross proceeds of approximately S$200.1 million

Property : The property located at 1 Changi Business Park Central 1,

Singapore 486036 and commonly known as One@Changi

City, together with the Plant and Equipment therein

Property Funds Appendix : Appendix 6 of the Code on Collective Investment Schemes

issued by the MAS

Property Management

Agreement

: The property management agreement entered into between

the Manager, the Trustee and ASPL pursuant to which ASPL

will provide certain property management, marketing, project

management and car park management services relating to

all properties of A-REIT located in Singapore with effect from

1 October 2012

Proposed Australian

Acquisition

: The proposed acquisition of a logistics property in Australia as

announced on 24 December 2015

Proposed Acquisition : The proposed acquisition of the Property

Purchase Agreement : The sale and purchase agreement which the Trustee and the

Vendor are required to enter into pursuant to the terms and

conditions of the Option Agreement

Purchase Consideration : The purchase consideration of S$420.0 million for the


Put Option : The Vendor’s right to require the Trustee to enter into the

Purchase Agreement with the Vendor for the acquisition of the

Property at the Purchase Consideration and on the terms of

the Purchase Agreement

Put Option

Exercise Period

: The period commencing immediately after the expiry of the

Call Option Exercise Period and ending at 5.00 p.m. on the

date falling two business days thereafter

36

Rectification Works

Security Sum

: The amount of S$82,000 to be withheld by the Trustee on

Completion in relation to rectification works to be carried out

by the Vendor in respect of certain identified defects in the

Property therein at its cost and expense within three months

after Completion

S$ and cents : Singapore dollars and cents

SGX-ST : Singapore Exchange Securities Trading Limited

sq m : Square metres

Substantial Unitholder : A person with an interest in Units constituting not less than

5.0% of the total number of Units in issue

THPL : Temasek Holdings (Private) Limited

Total Acquisition Cost : The total cost of the Proposed Acquisition to A-REIT

Trust Deed : The trust deed dated 9 October 2002 constituting A-REIT, as

amended, varied, or supplemented from time to time

Trustee : HSBC Institutional Trust Services (Singapore) Limited, in its

capacity as trustee of A-REIT

Unit : A unit representing an undivided interest in A-REIT

Unitholder : The registered holder for the time being of a Unit, including

person(s) so registered as joint holders, except where the

registered holder is CDP, the term “Unitholder” shall, in

relation to Units registered in the name of CDP, mean, where

the context requires, the Depositor whose Securities Account

with CDP is credited with Units

Unitholders’

Acquisition Approval

: Unitholders’ approval for the acquisition of the Property

Vendor : Ascendas Frasers Pte. Ltd.

VWAP : Volume weighted average price

The terms “Depositor” and “Depository Register” shall have the meanings ascribed to them

respectively in Section 81SF of the Securities and Futures Act, Chapter 289 of Singapore.

Words importing the singular shall, where applicable, include the plural and vice versa and words

importing the masculine gender shall, where applicable, include the feminine and neuter genders.

References to persons shall include corporations.

Any reference in this Circular to any enactment is a reference to that enactment for the time being

amended or re-enacted.

37

Any reference to a time of day in this Circular shall be a reference to Singapore time unless

otherwise stated.

Any discrepancies in the tables, graphs and charts between the listed amounts and totals thereof

are due to rounding. Where applicable, figures and percentages are rounded to one decimal

place.

38

APPENDIX A

DETAILS OF ONE@CHANGI CITY, THE EXISTING PORTFOLIO AND

THE ENLARGED PORTFOLIO

1. ONE@CHANGI CITY

1.1 Description of One@Changi City

The Property is strategically located in the heart of Changi Business Park in close proximity

to the Expo MRT station which serves the East-West line. It benefits from its proximity to

Changi Airport. The Property is also easily accessible via the East Coast Parkway

Expressway, Pan-Island Expressway and Tampines Expressway. Public transport services

and connectivity will be further enhanced when the Downtown Line Phase 3 is completed,

currently expected to be in 2017, where the Expo MRT station will also serve the Downtown

line.

The Property is located next to Changi City Point (a suburban retail mall) and Capri by

Fraser, Changi City (a hotel residence), with access to a wide variety of food and beverage

options, amenities, hotel and conference facilities located within walking distance.

The Property is a nine-storey, high quality multi-tenanted business park building, featuring

contiguous floor plates of 5,400 sq m to 8,900 sq m per floor, the largest of its kind in






The table below sets out a summary of selected information on the One@Changi City as at

31 December 2015 (unless otherwise indicated).

Location 1 Changi Business Park Central, Singapore 486036

Site Area (sq m) 46,969

Gross Floor Area (sq m) 71,158

Net Lettable Area (sq m) 63,106

Number of Storeys 9

Number of Tenants 9

Occupancy 97.9%

Land Tenure Leasehold for a term of 60 years commencing from

30 April 2009

Number of Car Park Lots 627(1)

Weighted Average Lease to

Expiry by Gross Rental Income

(years)

4.36

Note:

(1) Shared between One@Changi City, Changi City Point and Capri by Fraser, Changi City

A-1

1.2 Lease Expiry Profile for the Property

The chart below illustrates the lease expiry profile for the Property by gross rental income as

at 31 December 2015.

1.1%

17.2%

11.2%

41.0%

29.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

FY15/16 FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24

Lease Expiry Profile of One@Changi City

1.3 Trade Sector Analysis for the Property (as at 31 December 2015)

The chart below provides a breakdown by gross rental income of the different trade sectors

represented in the Property.

Others, 2%

Telecommunication& Datacentre,

6%

Financial, 75%

Information

Technology,

17%

2. EXISTING PORTFOLIO AND THE ENLARGED PORTFOLIO

A-REIT’s existing property portfolio as at the Latest Practicable Date comprises 102

properties in Singapore, 26 logistics properties in Australia and 2 business park properties

in China. As at 31 December 2015, the total assets of A-REIT amounted to approximately

S$9.4 billion. Its portfolio consists of the following:

• business and science park properties;

• integrated development, amenities and retail (IDAR);

• high-specifications industrial properties;

• light industrial properties/flatted factories; and

• logistics and distribution centres.

A-2

The table below sets out selected information on the Existing Portfolio and the Enlarged

Portfolio as at 31 December 2015 (unless otherwise indicated).

The

Property

Existing

Portfolio(1)

Enlarged

Portfolio

Gross Floor Area (sq m) 71,158 3,636,693 3,707,851

Net Lettable Area (sq m) 63,106 3,112,585 3,175,691

Number of Tenants 9 1,470 1,479

Valuation (S$ million) 437.8(3) 8,932.6 9,370.4

Committed Occupancy (%) 97.9 89.2 89.4

Weighted Average Lease to Expiry

(by Gross Rental Income) (years)

4.36 3.67 3.70

Weighted Average Land Lease to

Expiry (years)(2)

53.3 45.5 45.9

Notes:

(1) Based on 130 properties as at 31 December 2015.

(2) Excluding freehold properties.

(3) Based on the average of the two valuations by Knight Frank (S$439.0 million) and DTZ (S$436.6 million) as

at 2 December 2015.

2.1 Property Segment Analysis for the Existing Portfolio and the Enlarged Portfolio as at

31 December 2015

The chart below provides a breakdown by asset value of the different property segments

represented in the Existing Portfolio and the Enlarged Portfolio.

Business

Park,

14%

Science Park,

16% Hi-Specs

Industrial,

16%

Data

Centres,

6%

Light

Industrial, 7%

Flatted

Factories, 4%

Integrated

Development,

Amenities &

Retail, 7%

Logistics &

Distribution

Centres,

15%

Logistics &

Distribution

Centres

Australia,

12%

AREIT Beijing,

1%

AREIT

Shanghai, 2%

Before

Acquisition(1)Business

Park,

18%

Science Park,

15%

Hi-Specs

Industrial,

15%

Data

Centres,

6%

Light

Industrial, 7%

Flatted

Factories, 4%

Integrated

Development,

Amenities &

Retail, 7%

Logistics &

Distribution

Centres,

14%

Logistics and

Distribution

Centres

Australia,

11%

AREIT Beijing, 1%

AREIT Shanghai,

2%

After

Acquisition(2)

Notes:

(1) Based on 130 properties as at 31 December 2015.

(2) Assuming One@Changi City was acquired on 31 December 2015.

A-3

2.2 Lease Expiry Profile for the Existing Portfolio and the Enlarged Portfolio

The chart below illustrates the lease expiry profile for the Existing Portfolio and Enlarged

Portfolio by gross rental income as at 31 December 2015.

6.2

%

20

.1%

20

.0%

14

.9%

9.1

%

9.8

%

2.9

%

4.2

%

1.9

% 4.3

%

0.4

%

0.9

%

0.6

%

1.1

% 3.4

% 5.9

%

19

.3%

19

.9%

14

.8%

10

.4%

9.4

%

2.8

%

4.1

%

3.0

%

4.2

%

0.4

%

0.9

%

0.5

%

1.1

% 3.3

%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0% %

of

A-R

EIT

Gro

ss

Re

ve

nu

e

Before Acquisition

(130 properties as at 31 Dec 2015)

After Acquisition of One@Changi City

2.3 Top Ten Tenants for the Existing Portfolio and the Enlarged Portfolio as at

31 December 2015

The chart below sets out the gross rental income contribution by the top ten tenants of the

Existing Portfolio and the Enlarged Portfolio.

5.0%

2.2% 2.1%1.8%

1.6%1.3% 1.3% 1.2% 1.1% 1.1%

Telecomm-unications

Ltd

Ltd N.A Group Logistics Pte Ltd (S) Pte Ltd Sciences Institutes

(A*Star)

Singapore (1983)

Pte Ltd

Singapore Pte Ltd

Before Acquisition

Singapore DBS Bank Citibank, Wesfarmers Ceva Siemens Hydrochem Biomedical Cold Storage Equinix

Note: Based on 130 properties as at 31 December 2015.

A-4

4.8%

2.1% 2.1%1.8%

1.5% 1.5%1.2% 1.2% 1.2% 1.1%

Singapore Telecomm-unications

Ltd

DBSBank Ltd

Citibank, N.A

Wesfarmers Group

Ceva Logistics

JPMorgan Chase Bank,

NA

Siemens Pte Ltd

Hydrochem (S) Pte Ltd

Biomedical Sciences Institutes (A*Star)

Cold Storage Singapore

(1983) Pte Ltd

After Acquisition

Note: Assuming One@Changi City was acquired on 31 December 2015.

2.4 Trade Sector Analysis for the Existing Portfolio and the Enlarged Portfolio (as at

31 December 2015)


represented in the Existing Portfolio.

16.0%

0.6%

0.8%

0.8%

0.9%

1.5%

1.5%

1.5%

1.5%

1.6%

2.4%

2.7%

5.3%

6.8%

7.4%

7.9%

9.1%

9.2%

10.8%

11.7%

Others

Rubber and Plastic Products

Fabricated Metal Products

Printing & Reproduction of Recorded Media

Repair and Servicing of vehicles

Construction

Textiles & Wearing Apparels

Hotels and restaurants

Chemical

Medical, Precision & Optical Instruments, Clocks

Healthcare Products

Food Products & Beverages

Life Science

Financial

Electronics

Telecommunication & Datacentre

M&E and Machinery and Equipment

Information Technology

Distributors, trading company

3rd Party Logistics, Freight Forwarding

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Note: Based on 130 properties as at 31 December 2015.

A-5


represented in the Enlarged Portfolio.

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

3rd Party Logistics, Freight Forwarding

Distributors, trading company

Information Technology

Financial

M&E and Machinery & Equipment

Telecommunication & Datacentre

Electronics

Life Science

Food Products & Beverages

Healthcare Products

Chemical

Construction

Textiles & Wearing Apparels

Hotels and restaurants

Medical, Precision & Optical Instruments, Clocks

Printing & Reproduction of Recorded Media

Fabricated Metal Products

Rubber and Plastic Products

Repair and Servicing of vehicles

Others

11.3%

10.4%

10.0%

9.0%

8.8%

7.8%

7.1%

5.1%

2.6%

2.3%

1.5%

1.5%

1.5%

1.4%

1.4%

0.9%

0.8%

0.8%

0.6%

15.5%

Note: Assuming One@Changi City was acquired on 31 December 2015.

A-6

APPENDIX B

VALUATION CERTIFICATES

B-1

APPENDIX C

INDEPENDENT FINANCIAL ADVISER’S LETTER

HONG LEONG FINANCE LIMITED(Incorporated in the Republic of Singapore)

Company Registration Number: 196100003D)

29 January 2016

The Independent Directors and Audit Committee of


(in its capacity as the manager of Ascendas Real Estate Investment Trust)

1 Fusionopolis Place

#10-10 Galaxis

Singapore 138522

HSBC Institutional Trust Services (Singapore) Limited

(in its capacity as the trustee of Ascendas Real Estate Investment Trust)

21 Collyer Quay

#13-02 HSBC Building

Singapore 049320

Dear Sirs

(1) THE PROPOSED ACQUISITION OF ONE@CHANGI CITY

(2) THE PROPOSED ISSUANCE OF NEW UNITS AT AN ISSUE PRICE OF S$2.223 PER UNIT

AS PARTIAL CONSIDERATION FOR THE PROPOSED ACQUISITION OF ONE@CHANGI

CITY

(TOGETHER, THE “PROPOSED TRANSACTIONS”)

UNITHOLDERS SHOULD NOTE THAT RESOLUTION 2 RELATING TO THE PROPOSED

ISSUANCE OF CONSIDERATION UNITS IS CONDITIONAL UPON RESOLUTION 1 BEING

PASSED. IN THE EVENT THAT RESOLUTION 1 IS NOT PASSED, THE MANAGER WILL NOT

PROCEED WITH RESOLUTION 2.

For the purpose of this letter, capitalised terms not otherwise defined shall have the meaning

given to them in the circular dated 29 January 2016 to the unitholders of Ascendas Real Estate

Investment Trust (“A-REIT”) (the “Circular”).

1. INTRODUCTION

This letter (“Letter”) has been prepared for inclusion in the Circular to be issued by Ascendas

Funds Management (S) Limited, in its capacity as the manager of A-REIT (the “Manager”),

in connection with the Proposed Transactions.

This Letter sets out, inter alia, the opinion of Hong Leong Finance Limited (“HLF”), as the

independent financial adviser, on whether the Proposed Transactions are on normal

commercial terms and are not prejudicial to the interests of A-REIT and its minority

Unitholders and HLF’s opinion to the Independent Directors and Audit Committee of the

Manager in this respect. This Letter sets forth factors considered in arriving at our view.

C-1

The Circular and the Letter to Unitholders included therein will provide, inter alia, details of

the Proposed Transactions, the opinion of the Audit Committee and the recommendation(s)

of the Independent Directors in relation to the Proposed Transactions, having considered

HLF’s opinion in this Letter.

The Proposed Acquisition

On 9 December 2015, the Trustee entered into the Option Agreement in relation to the

Proposed Acquisition. Pursuant to the Option Agreement, the Trustee and the Vendor are

required to enter into the Purchase Agreement on the day the Call Option is exercised by the

Trustee, or on the day the Put Option is exercised by the Vendor (as the case may be).

The Purchase Consideration of S$420.0 million is payable to the Vendor for the proposed

acquisition of the property located at 1 Changi Business Park Central 1, Singapore 486036

and commonly known as One@Changi City, together with the Plant and Equipment1 therein

(collectively, the “Property”). The Trustee has paid an Option Fee of S$10.0 million to the

Vendor upon the signing of the Option Agreement, which shall be applied towards part

payment of the deposit to be paid by the Trustee pursuant to the Purchase Agreement upon

exercise of the option. The Purchase Consideration shall be partly satisfied by the issuance

of approximately S$210.0 million worth of Consideration Units to the Vendor (or its

nominee(s)) and the balance of the Purchase Consideration for the amount of approximately

S$210.0 million will be in cash (subject to the approval of unitholders of A-REIT being sought

for the proposed issuance of the Consideration Units). The principal terms and conditions of

the Option Agreement and the Purchase Agreement can be found in paragraphs 2.3 and 2.4

of the Letter to Unitholders, respectively.

One@Changi City is a nine-storey, high quality multi-tenanted business park building with

contiguous floor plates of 5,400 – 8,900 sq m per floor. The land tenure is an unexpired

residue of leasehold interest of 60 years commencing from 30 April 2009.

The Manager has commissioned an independent property valuer, Knight Frank Pte Ltd

(“Knight Frank”), and the Trustee has commissioned another independent property valuer,

DTZ Debenham Tie Leung (SEA) Pte Ltd (“DTZ” and together with Knight Frank, the

“Independent Valuers”), to value the Property. Knight Frank, in its report dated 2 December

2015, stated that the valuation of the Property is S$439.0 million and DTZ, in its report dated

2 December 2015, stated that the valuation of the Property is S$436.6 million. The methods

used by the Independent Valuers were the capitalisation and the discounted cash flow

method.

As at 22 January 2016, being the latest practicable date prior to the printing of the Circular

(the “Latest Practicable Date”), Ascendas Pte. Ltd. (“APL”), through Ascendas Land

(Singapore) Pte Ltd and the Manager, is deemed to have an aggregate interest in

438,598,700 Units, which is equivalent to approximately 17.1% of the total number of Units

in issue, and is therefore regarded as a “controlling Unitholder” of A-REIT under both the

Listing Manual (the “Listing Manual”) of Singapore Exchange Securities Trading Limited

(“SGX-ST”) and Appendix 6 of the Code on Collective Investment Schemes (the “Property

Funds Appendix”) issued by the Monetary Authority of Singapore (“MAS”). In addition, as

the Manager is a wholly-owned subsidiary of APL, APL is therefore regarded as a “controlling

shareholder” of the Manager under both the Listing Manual and the Property Funds

Appendix.

1 “Plant and Equipment” refers to the fixed plant and equipment (including, without limitation, all fixtures, lifts,

air-conditioning equipment and other plant and equipment necessary for the operation of the Property), if any,

located in or on or which otherwise exclusively relate to the Property or the operations of the Property and which

are owned by the Vendor in its capacity as owner of the Property.

C-2

Under Chapter 9 of the Listing Manual, where A-REIT proposes to enter into a transaction

with an interested person and the value of the transaction (either in itself or when aggregated

with the value of other transactions, each of a value equal to or greater than S$100,000, with

the same interested person during the same financial year) is equal to or exceeds 5.0% of

A-REIT’s latest audited NTA, Unitholders’ approval is required in respect of the transaction.

Based on the A-REIT Audited Financial Statements, the NTA of A-REIT was approximately

S$5,013.6 million as at 31 March 2015. Paragraph 5 of the Property Funds Appendix also

imposes a requirement for Unitholders’ approval for an interested party transaction by

A-REIT where the value exceeds 5.0% of A-REIT’s latest audited net asset value (“NAV”).

Based on the A-REIT Audited Financial Statements, the NAV of A-REIT was approximately

S$5,013.6 million as at 31 March 2015.

Accordingly, if the value of a transaction which is proposed to be entered into in the current

financial year by A-REIT with an interested person or an interested party (as the case may

be) (either in itself or in aggregation with all other earlier transactions, each of a value equal

to or greater than S$100,000) entered into with the same interested person or interested

party (as the case may be, during the current financial year) is equal to or in excess of

approximately S$250.6 million, such a transaction would be subject to Unitholders’ approval.

Given the Purchase Consideration of S$420.0 million (approximately 8.4% of the NTA and

NAV of A-REIT as at 31 March 2015), the value of the Proposed Acquisition exceeds each

of the above thresholds.


Resolution of the Unitholders for the Proposed Acquisition.

The proposed issuance of the Consideration Units

Based on the Purchase Consideration of S$420.0 million, approximately S$210.0 million will

be satisfied by way of issuance of the Consideration Units to the Vendor (or its nominee(s))

and the remaining payment for the amount of approximately S$210.0 million in cash. Based

on the issue price of S$2.223 per Consideration Unit, the total number of Consideration Units

will be 94,466,936 and will represent approximately 3.7% of the total number of Units in issue

as at the Latest Practicable Date.

As APL holds an indirect 50.0% interest in the Vendor, the issuance of the Consideration

Units to the Vendor will constitute a placement to associated companies of Substantial

Unitholders. As at the Latest Practicable Date, APL has deemed interests of (i) 17.1% in

A-REIT and (ii) 100.0% in the Manager. Under Rule 812 of the Listing Manual, any issue of

Units must not be placed to a Substantial Unitholder unless Unitholders’ approval is

obtained.

The proposed issuance of the Consideration Units to the Vendor will constitute an “interested

person transaction” under Chapter 9 of the Listing Manual, in respect of which the approval

of Unitholders is required.


Resolution of the Unitholders for the proposed issuance of the Consideration Units to the

Vendor pursuant to Rule 805(1) of the Listing Manual.

The Vendor has nominated ALS (a wholly-owned subsidiary of APL) to receive the



C-3

2. TERMS OF REFERENCE

HLF has been appointed as the Independent Financial Adviser to the Independent Directors

and Audit Committee of the Manager to advise them as to:

(i) whether the Proposed Acquisition is on normal commercial terms and is not prejudicial

to the interests of A-REIT and its minority Unitholders; and

(ii) whether the proposed issuance of the Consideration Units is based on normal

commercial terms and not prejudicial to the interests of A-REIT and its minority

Unitholders.

We were neither a party to the negotiations in relation to the Proposed Acquisition, nor were

we involved in the deliberations leading up to the decision by the Manager to undertake the

Proposed Acquisition.

We make no representations or warranties in relation to the merits or risks (if any) of the

Proposed Acquisition other than to express an opinion on whether the terms of the Proposed

Acquisition are on normal commercial terms and are not prejudicial to the interests of A-REIT

and its minority Unitholders. Our terms of reference do not require us to evaluate or comment

on the strategic or long-term commercial merits or risks of the Proposed Acquisition or on the

prospects of A-REIT or any of subsidiaries. Such evaluations or comments remain the

responsibility of the Directors and the management of the Manager although we may draw

upon their views or make such comments in respect thereof (to the extent deemed necessary

or appropriate by us) in arriving at our opinion as set out in this Letter.

We were also not requested or authorised to solicit, and we have not solicited, any

indications of interest from any third party with respect to any other proposals for

transactions similar to the Proposed Acquisition. In this regard, we are not addressing the

relative merits of the Proposed Acquisition as compared to any alternative transaction

previously considered by the Manager or which otherwise may have been available to

A-REIT currently or in the future, and such comparison and consideration remain the

responsibility of the Directors and the management of the Manager.

We have held discussions with the Directors and the management of the Manager. We have

examined the information contained in the Option Agreement, the Purchase Agreement, the

Circular as well as publicly available information collated by us and information provided to

us by the Directors and the management of the Manager, and the valuation reports, both

dated 2 December 2015 (the “Valuation Reports”), by the independent property valuers

commissioned by the Trustee and the Manager, being DTZ Debenham Tie Leung (SEA) Pte

Ltd and Knight Frank Pte Ltd respectively. With regards to the Valuation Reports, we are not

experts and do not hold ourselves to be experts in the valuation of the Property and we have

relied upon the Valuation Reports prepared by the Independent Valuers appointed by the

Manager and the Trustee. We have not independently verified such information, whether

written or verbal, and accordingly cannot and do not warrant, and do not accept any

responsibility for the truth, accuracy, completeness or adequacy of such information. Whilst

care has been exercised in reviewing the information, which we have relied on, we have not

independently verified the information. We have nevertheless made reasonable enquiries

and exercised our judgement on the reasonable use of such information and have found no

reason to doubt the accuracy or reliability of the information. The respective valuation

certificates and summaries prepared by the Independent Valuers are set out in Appendix B

of the Circular.

C-4

We have relied upon the assurances of the Directors of the Manager (including those who

may have delegated detailed supervision of the Circular) made pursuant to the Directors’

Responsibility Statement set out under paragraph of the Letter to Unitholders that the

Directors collectively and individually accept full responsibility for the accuracy of the

information given in the Circular and confirm after making all reasonable enquiries, that to

the best of their knowledge and belief, the Circular constitutes full and true disclosure of all

material facts about the Proposed Acquisition, the Consideration Units, A-REIT and its

subsidiaries, and the Directors are not aware of any facts the omission of which would make

any statement in the Circular misleading. Accordingly, no representation or warranty,

expressed or implied, is made by us, and no responsibility is accepted by us, concerning the

accuracy, completeness or adequacy of all such information, provided or otherwise made

available to us or relied upon by us as described above.

Furthermore, our terms of reference do not require us to conduct a comprehensive

independent review of the business, operations or financial condition of A-REIT or any of its

subsidiaries, and we do not express an opinion on the future prospects of A-REIT or any of

its subsidiaries. We are therefore not expressing any opinion herein as to the future financial

or other performance of those companies.

Our opinions are based upon market, economic, industry, monetary, regulatory and other

conditions prevailing as at the Latest Practicable Date, and information made available to us

as at the Latest Practicable Date. Such conditions and information may change significantly

over a short period of time. We assume no responsibility to update, revise or reaffirm our

opinions in light of any subsequent development after the Latest Practicable Date that may

affect our opinions contained therein. Unitholders should further take note of any

announcements relevant to their considerations of the Proposed Acquisition which may be

released by or on behalf of the Manager or A-REIT and other relevant sources after the

Latest Practicable Date.

In rendering our advice, we have not had regard to the specific investment objectives,

financial situation, tax position, risk profile or individual circumstances of any individual

minority Unitholder. As different minority Unitholders would have different investment

objectives and profiles, we would advise the Independent Directors to recommend that any

individual minority Unitholder who may require specific advice in relation to his investment

portfolio should consult his stockbroker, bank manager, solicitor, accountant, tax adviser or

other professional advisers immediately.

A-REIT has been advised by its own professional adviser(s) in the preparation of the

Circular (other than this Letter). We have had no role or involvement and have not

provided any advice (financial or otherwise) whatsoever in the preparation, review and

verification of the Circular (other than this Letter) and our responsibility is as set out

above in relation to this Letter. Accordingly, we take no responsibility for, and express

no views, whether expressed or implied, on the contents of the Circular (except for this

Letter).

We have prepared this Letter for the use of the Independent Directors and Audit

Committee in connection with their consideration of the Proposed Acquisition and

their advice and recommendations to the Unitholders in respect thereof. The

recommendations made to the Unitholders in relation to the Proposed Acquisition

remain the responsibility of the Independent Directors and Audit Committee. This

Letter is further given for the benefit of HSBC Institutional Trust Services (Singapore)

Limited, as trustee of A-REIT.

Our opinion in relation to the Proposed Acquisition should be considered in the

context of the entirety of our advice as set out in this Letter and the Circular.

C-5

A copy of this Letter may be reproduced in the Circular and for that purpose may be

discussed or quoted at the extraordinary general meeting of Unitholders convened to

consider the Proposed Acquisition and the proposed issuance of the Consideration Units and

in relation to any resolution tabled thereof. Other than for this intended purpose, this Letter

should not be used for any other purposes and/or by other persons without the prior consent

of HLF provided that this shall not prevent A-REIT, the Manager, its Directors and the

Unitholders from reproducing, disseminating or quoting this letter (or any part thereof) for the

purpose of any matter relating to the Proposed Transactions.

3. SALIENT INFORMATION ON THE PROPOSED ACQUISITION

Salient information on the Proposed Acquisition, including the terms and conditions thereon,

is set out in the Circular. Summarised extracts are presented in this Letter.

3.1. Description of the Property

The Property is located in the heart of Changi Business Park and is easily accessible via the

East Coast Parkway Expressway, Pan Island Expressway and Tampines Expressway. The

Property is well-served by public transport, being in close proximity to the Singapore Expo

mass rapid transit station which serves the East-West line and shall also serve the Downtown

Line upon the expected completion of the Downtown Line Phase 3 in 2017. The Property also

benefits from its proximity to Changi Airport.

The Property is the business park component of the mixed-use development known as

Changi City, which also has a hotel residence component (Capri by Fraser, Changi City) and

a retail component (Changi City Point).

The Property is a nine-storey, high quality multi-tenanted business park building, with

contiguous floor plates of 5,400 sq m to 8,900 sq m per floor, the largest of its kind in






3.2. Details of the Proposed Acquisition

On 9 December 2015, the Trustee entered into the Option Agreement with the Vendor in

relation to the Proposed Acquisition. Pursuant to the Option Agreement, the Trustee and the

Vendor are required to enter into the Purchase Agreement on the day the call option is

exercised by the Trustee, or on the day the put option is exercised by the Vendor (as the case

may be).

The Vendor is a joint venture between Frasers Centrepoint Limited (“FCL”) and APL, where

a wholly-owned subsidiary of FCL holds a 50.0% interest in the Vendor and the remaining

50.0% interest is held by ADPL, which is wholly-owned by ALS, a direct wholly-owned

subsidiary of APL. APL is a wholly-owned subsidiary of Ascendas-Singbridge Pte. Ltd. The

Purchase Consideration payable to the Vendor in connection with the Proposed Acquisition

is S$420.0 million. The Trustee has paid an option fee of S$10.0 million to the Vendor upon

the signing of the Option Agreement, which is refundable to the Trustee if the call option and

the put option is not exercised. The balance of S$410.0 million will be payable upon

Completion.

C-6

The principal terms of the Option Agreement include, amongst others, the following

conditions precedent:

(i) the Unitholders’ approval being obtained for the acquisition of the Property (the

“Unitholders’ Acquisition Approval”); and

(ii) JTC Corporation’s (“JTC”) written confirmation that it has no objections to the execution

and registration of the transfer instrument in favour of A-REIT in relation to the Property

(the “JTC Final Confirmation”).

3.3. Total Cost of the Proposed Acquisition

The current estimated Total Acquisition Cost is approximately S$438.9 million, comprising:

(i) the Purchase Consideration of S$420 million;

(ii) the Acquisition Fee (payable by issuance of the Acquisition Fee Units to the Manager)

of S$4.2 million2; and



Acquisition.

3.4. Method of Financing the Proposed Acquisition

As set out in Paragraph 2.8 of the Letter to Unitholders, the Manager intends to finance the

Total Acquisition Cost in the following manner:

(i) the issuance of the Consideration Units to the Vendor (or its nominee(s));

(ii) S$224.7 million out of the EFR Proceeds of a total of approximately S$344.9 million3

(refer to the EFR Announcements dated 9 December 2015 and 15 January 2016 for

further details); and

(iii) the issuance of the Acquisition Fee Units amounting to S$4.2 million as the Acquisition

Fee.

Taking into consideration the Equity Fund Raising and assuming that the cash component of

the Total Acquisition Cost is fully funded by the Equity Fund Raising, the level of Aggregate

Leverage4 of A-REIT will decrease from 39.4% as at 30 November 2015 to 36.5%

immediately after the Proposed Acquisition.

If Resolution 2 relating to the proposed issuance of Consideration Units is not passed, the

Purchase Consideration of S$420.0 million will be paid to the Vendor in cash. In such

circumstance, the Manager expects to finance the cash component of the Total Acquisition

Cost using a combination of the net proceeds from the Equity Fund Raising and debt

2 As the Proposed Acquisition will constitute an “interested party transaction” under the Property Funds Appendix, the

Acquisition Fee Units shall not be sold within one year from the date of issuance in accordance with Paragraph 5.7

of the Property Funds Appendix.


down debt.

4 “Aggregate Leverage” refers to the ratio of the value of borrowings (inclusive of proportionate share of borrowings

of jointly controlled entities) and deferred payments (if any) to the value of the Deposited Property. “Deposited

Property” refers to the gross assets of A-REIT, including all its authorised investments held or deemed to be held

upon the trust under the Trust Deed.

C-7

financing. Assuming that 60% of the cash component of the Total Acquisition Cost is funded

by the Equity Fund Raising, the level of Aggregate Leverage of A-REIT will decrease from

39.4% as at 30 November 2015 to 38.6% immediately after the Proposed Acquisition.

With effect from 1 January 2016, the Aggregate Leverage of A-REIT may not exceed 45.0%

of its Deposited Property.

3.4.1. Private Placement

The Manager had, on 10 December 2015, announced that the book of orders for the

Private Placement has closed, with 90,000,000 Units to be issued at an issue price

of S$2.223 per Unit. The gross proceeds from the Private Placement amounts to

S$200.1 million.

Further to the above announcement, on 15 December 2015, A-REIT has announced

that the SGX-ST has granted its approval in-principle for the listing of, and dealing in

and quotation on the Mainboard of the SGX-ST of 90,000,000 new units of A-REIT

(“New Units”) to be issued pursuant to the Private Placement at an issue price of

S$2.223 per New Unit.

3.4.2. Preferential Offering

The Manager had, on 10 December 2015, announced that the New Units to be issued

pursuant to the Preferential Offering will be issued at an issue price of S$2.218 per

New Unit. We note that the Manager had announced, on 9 December 2015, that APL

had irrevocably undertaken to subscribe for up to S$35.0 million worth of New Units

under the Preferential Offering.

The Manager had, on 15 January 2016, announced that a total of 65,293,948 New

Units will be issued pursuant to the Preferential Offering at the issue price of S$2.218

per New Unit to raise gross proceeds of approximately S$144.8 million. Together with

the gross proceeds of approximately S$200.1 million raised from the Private

Placement, gross proceeds of a total of approximately S$344.9 million have been

raised from the Equity Fund Raising.

4. EVALUATION OF THE PROPOSED ACQUISITION

In the course of our evaluation of the Proposed Acquisition, we have given due consideration

to, inter alia, the following factors:

(a) the rationale for the Proposed Acquisition;

(b) pro forma financial effects of the Proposed Acquisition;

(c) valuations of the Property prepared by the Independent Valuers;

(d) property yield of the Property as compared to comparable properties owned by A-REIT;

(e) property yield of the Property as compared to comparable properties owned by other

real estate investment trusts (“REITs”); and

(f) occupancy rates.

C-8

4.1. Rationale for the Proposed Acquisition

The Manager’s rationale for the Proposed Acquisition is summarised as follows:

(i) the Proposed Acquisition is in line with A-REIT’s investment strategy;

(ii) enables A-REIT to capitalise on the competitive strengths of the Property;

(iii) complements and enhances A-REIT’s market share in the Changi Business Park, as

well as the overall business and science park sector in Singapore; and

(iv) provides income diversification and potential upside, as well as increased exposure to

high quality tenants.

Please refer to Paragraph 4 of the Letter to Unitholders in the Circular for further details on

the rationale of the Proposed Acquisition.

4.2. Pro Forma Financial Effects of the Proposed Acquisition

The pro forma financial effects of the Proposed Acquisition on the distribution per unit

(“DPU”) and NAV per unit have been extracted from Paragraph 5.2 of the Letter to

Unitholders and set out in italics below. All terms and expressions used in this extract below

shall have the same meaning as those defined in the Circular, unless otherwise stated.

Given that it is intended for the Proposed Acquisition to be funded by the EFR Proceeds and

the issuance of Consideration Units, the pro forma financial effects of the Proposed

Acquisition on the DPU and NAV per Unit and the pro forma capitalisation of A-REIT based

on the Proposed Acquisition being fully funded by equity (the “Equity Funded Method”) are

also presented below. These are strictly for illustrative purposes and were prepared based

on the A-REIT Audited Financial Statements, taking into account the Total Acquisition Cost,

and assuming that:


(ii) the Total Acquisition Cost of S$438.9 million was fully funded by way of issue of Units;

(iii) the Units were issued at an illustrative price of S$2.223 per Unit; and

(iv) in respect of the Enlarged Portfolio, the Manager had elected to receive 80.0% of its


C-9

4.2.1 Pro Forma DPU (Based on the Equity Funded Method)



Acquisition on A-REIT’s DPU for FY14/15 as if the Proposed Acquisition was

completed on 1 April 2014 and A-REIT held and operated the Property through to

31 March 2015 are as follows:

Effects of the


Before the

Proposed

Acquisition

After the

Proposed

Acquisition

Net Income (S$’000) 462,727 488,439


Issued Units (’000) 2,405,707(1) 2,603,227(2)

DPU (cents) 14.600 14.404

Notes:






4.2.2 Pro Forma NAV (Based on the Equity Funded Method)



Acquisition on A-REIT’s NAV per Unit as at 31 March 2015, as if the Proposed

Acquisition was completed on 31 March 2015 are as follows:

Effects of the


Before the

Proposed

Acquisition

After the

Proposed

Acquisition

NAV (S$’000) 5,013,590 5,452,490

Issued Units (’000) 2,405,707(1) 2,603,227(2)


Notes:






C-10

4.2.3 Pro Forma Capitalisation (Based on the Equity Funded Method)


Based on the Equity Funded Method, the pro forma capitalisation of A-REIT as at

31 March 2015, as if the Proposed Acquisition was completed on 31 March 2015, is

as follows:

Effects of the


Before the

Proposed

Acquisition

After the

Proposed

Acquisition

Current

Unsecured loans and borrowings

(S$’000) 285,525 285,525

Non-Current

Unsecured loans and borrowings

(S$’000) 2,086,444 2,086,444



Unitholders’ funds (S$’000) 5,013,590 5,452,490

Total Capitalisation (S$’000) 7,751,583 8,190,483(1)

Note:


issuable at an illustrative price of S$2.223 per new Unit) issued to fully fund the Total Acquisition

Cost (purely for illustrative purposes only).

4.3. Valuations of the Proposed Acquisition prepared by the Independent Valuers

4.3.1. The Independent Valuations of the Property

The Manager and the Trustee have each commissioned an independent property

valuer, Knight Frank and DTZ respectively, to value the Property.

The appraised value of the Property as at 2 December 2015, as determined by Knight

Frank and DTZ, are as follows:

Property

Appraised Value Purchase

ConsiderationKnight Frank DTZ

One@Changi City S$439.0 million S$436.6 million S$420.0 million

The key points to be highlighted in respect of the Independent Valuations are as

follows:

(i) the basis of valuation used is “Market Value”, the definitions of which are

broadly consistent among both valuations by the Independent Valuers;

(ii) the relevant date for the valuations undertaken is 2 December 2015;

C-11

(iii) both Knight Frank and DTZ used the Capitalisation Approach and Discounted

Cash Flow Analysis; and

(iv) the methods used by the Independent Valuers are widely accepted methods for

the purpose of valuing income-producing properties.

As illustrated in the table above, the Purchase Consideration represents a discount

of approximately 4.52% and 3.95% to the valuations by Knight Frank and DTZ

respectively.

Please refer to Appendix B of the Circular for the Valuation Certificates.

4.3.2. Comparison of Capitalisation Rate, Discount Rates and Terminal Yields

We have compared the capitalisation rates, discount rates and terminal yields used

by the Independent Valuers with those used in the latest independent valuation of the

business park properties owned by A-REIT (the “A-REIT Existing Business Park

Properties”) as set out below:

Valuation

Capitalisation

Approach DCF Approach

Capitalisation Rate

(%)

Discount Rate

(%)

Terminal Yield

(%)

Knight Frank(1) 6.00 8.25 6.25

DTZ(1) 6.00 8.00 6.25

A-REIT Existing

Business Park

Properties(2) 5.50 – 6.75 7.70 – 8.00 5.75 – 7.00

Notes:

(1) Rates used by Knight Frank and DTZ are disclosed in their respective independent valuation reports

as at 2 December 2015.

(2) Only business park properties within A-REIT’s portfolio are selected; as such, the capitalisation

rates, discount rates and terminal yields are not representative of the entire portfolio of properties

for A-REIT.

Based on the table above, we highlight the following:

(i) the capitalisation rates used by the Independent Valuers in their valuations of

the Property are approximately consistent with one another and broadly in-line

with the capitalisation rates used in the latest independent valuation of the

A-REIT Existing Business Park Properties;

(ii) the discount rates used by the Independent Valuers in their valuations of the

Property are approximately consistent with one another;

(iii) the discount rate used by Knight Frank is higher than the range used in the

latest independent valuation of the A-REIT Existing Business Park Properties

while the discount rate used by DTZ is in-line with the range used in the latest

independent valuation of the A-REIT Existing Business Park Properties; and

(iv) the terminal yields used by the Independent Valuers in their valuations of the

Property are approximately consistent with one another. The range of terminal

C-12

yields used in the latest independent valuations of the A-REIT Existing Business

Park Properties, and the terminal yields used by the Independent Valuers are

within range.

The above analysis serves only as one factor considered by us in our evaluation and

may not be meaningful to a satisfactory extent as the Property differs from the

A-REIT Existing Business Park Properties in many aspects (such as location,

accessibility, profile and composition of tenants, proximity to major venues and/or

attractions, outstanding lease tenure and other relevant factors). Accordingly, the

Independent Directors and the Audit Committee should note that any comparison

made with respect to the Property to the A-REIT Existing Business Park Properties

serve as an illustrative guide only.

4.4. Property Yield of the Property as compared to Comparable Properties owned by

A-REIT

We note that the Property is classified as a “business park property”. For the purposes of our

evaluation and for illustration, we set out below comparisons of the gross property yield

expected to be generated from the Property and properties which are classified as “Business

Parks & Science Park Properties” in the portfolio of A-REIT.

We have used the gross property yield for purpose of comparison as only data on gross

revenue is publicly available.

Property Name

Valuation

Date

Valuation

(S$’000)

Gross

Property

Income

(S$’000)

Gross

Property

Yield (1)

(%)

Occupancy

Rate

(%)

Science Parks

Neuros & Immunos 31-Mar-15 131,000 19,300 14.73 100.00

Nexus@ one-north 31-Mar-15 189,400 12,800 6.76 93.50

PSB Science ParkBuilding 31-Mar-15 82,000 3,900 4.76 100.00

The Rutherford &Oasis 31-Mar-15 82,200 6,400 7.79 78.00

Cintech I 31-Mar-15 48,600 5,300 10.91 90.30

Cintech II 31-Mar-15 43,900 4,200 9.57 94.40

Cintech III/IV 31-Mar-15 118,200 11,400 9.64 97.40

The Alpha 31-Mar-15 117,900 9,700 8.23 75.30

The Aries 31-Mar-15 69,500 4,900 7.05 86.20

The Capricorn 31-Mar-15 129,000 11,000 8.53 82.20

The Gemini 31-Mar-15 139,700 12,200 8.73 97.30

The Galen 31-Mar-15 133,900 14,200 10.60 96.70

The Kendall 31-Mar-15 116,400 100 0.09(2) 93.20

Average(3) 8.94

Maximum 14.73

Minimum 4.76

C-13

Property Name

Valuation

Date

Valuation

(S$’000)

Gross

Property

Income

(S$’000)

Gross

Property

Yield (1)

(%)

Occupancy

Rate

(%)

Business Parks

Four Acres Singapore 31-Mar-15 58,300 4,200 7.20 100.00

Techquest 31-Mar-15 24,800 2,300 9.27 75.50

13 InternationalBusiness Park 31-Mar-15 25,500 1,400 5.49 52.00

iQuest@IBP 31-Mar-15 35,000 2,600 7.43 60.70

Acer Building 31-Mar-15 83,900 7,300 8.70 76.80

31 InternationalBusiness Park 31-Mar-15 216,100 20,800 9.63 81.80

Nordic EuropeanCentre 31-Mar-15 116,100 11,300 9.73 92.30

Honeywell Building 31-Mar-15 70,500 7,200 10.21 97.70

1 Changi BusinessPark Avenue 1 31-Mar-15 48,600 1,300 2.67 54.90

Hansapoint@CBP 31-Mar-15 86,900 6,400 7.36 97.60

1, 3 & 5 ChangiBusiness ParkCrescent 31-Mar-15 333,000 27,700 8.32 95.00

DBS Asia Hub 31-Mar-15 152,300 10,500 6.89 100.00

AkzoNobel House 31-Mar-15 68,100 5,700 8.37 63.60

Average(3) 7.79

Maximum 10.21

Minimum 2.67

Science Parks and Business Parks

Average(3) 8.37

Maximum 14.73

Minimum 2.67

ProposedAcquisition 2-Dec-15 438,900(5) 35,440 8.07(4) 97.9(6)

Source: Circular, FY14/15 Annual Report of A-REIT and Manager’s inputs

Notes:

(1) The gross property yields are computed based on the gross property income for each property divided by the

valuation of the respective property as extracted from the FY14/15 Annual Report of A-REIT.

(2) The acquisition of the property was completed on 30 March 2015. We have excluded the gross property yield

of the property in comparison as the property does not have a full year of financial contribution to the portfolio.

The financial year ended is 31 March 2015.

(3) The average gross property yields are based on the valuation of each property.

(4) The property yield for the Proposed Acquisition is computed based on the expected gross property income for

the Property divided by the Total Acquisition Cost.

(5) Total Acquisition Cost.

(6) As at 31 December 2015.

C-14

Based on the above analysis, we note that the gross property yield of 8.07% (based on gross

property income) expected to be generated from the Property is:

(i) within the range and below the average of the gross property yields of the properties

which are classified under “Science Parks properties” in the portfolio of A-REIT;

(ii) within the range and above the average of the gross property yields of the properties

which are classified under “Business Parks properties” in the portfolio of A-REIT; and

(iii) within the range and below the average of the gross property yields of the properties

which are classified under “Business Parks & Science Park Properties” in the portfolio

of A-REIT.

4.5. Property Yield of the Property as compared to Comparable Properties owned by other

REITs

The properties set out in the table below are owned by REITs listed and traded on the

SGX-ST and are considered to be broadly comparable to the Proposed Acquisition in terms

of being “Business & Science Park Properties” (“Selected Comparable Properties”).

Property Name

Valuation

Date

Valuation

(S$’000)

Gross

Property

Income

(S$’000)

Gross

Property

Yield(1)

(%)

Occupancy

Rate

(%)

Soilbuild Business

Space REIT

EIGHTrium 31-Dec-14 102,000 9,000 8.82 100.00

Solaris 17-Feb-15 355,000 17,000 4.79 100.00

Mapletree Industrial

Trust

The Signature 31-Mar-15 141,900 9,000 6.32 45.80

The Strategy 31-Mar-15 283,200 26,800 9.47 97.50

The Synergy 31-Mar-15 124,700 12,500 10.04 92.30

AIMS AMP Capital

Industrial REIT

1A International

Business Park 31-Mar-15 86,700 6,500 7.54 100.00

Average(2) 7.83

Maximum 10.04

Minimum 4.79

The Property 2-Dec-15 438,900(4) 35,440 8.07(3) 97.9(5)

Source: Annual Reports of Soilbuild Business Space REIT, Mapletree Industrial Trust and AIMS AMP Capital

Industrial REIT and Manager’s inputs

Notes:

(1) The gross property yields are computed based on the gross property income for each property divided by the

valuation of the respective property as extracted from the Annual Reports of Soilbuild Business Space REIT,

Mapletree Industrial Trust and AIMS AMP Capital Industrial REIT.

(2) The average gross property yields are based on the valuation of each property.

C-15

(3) The property yield for the Property is computed based on the expected gross property income for the Property

divided by the Total Acquisition Cost.

(4) Total Acquisition Cost.

(5) As at 31 December 2015.

Based on the above analysis, we note that the gross property yield of 8.07% (based on gross

property income) expected to be generated from the Property falls within the range and is

above the average of the gross property yields of the Selected Comparable Properties.

We highlight that the analysis above is only one factor considered by us in our evaluation and

is limited in its utility to the extent that the Property differs from the Selected Comparable

Properties in aspects such as location, accessibility, title, net lettable area, composition of

tenants, proximity to major venues and/or attractions, outstanding lease tenure, market risks,

track record and other relevant factors. In addition, the valuations of the Selected

Comparable Properties were undertaken at different points in time under different market and

economic conditions. Accordingly, the Independent Directors and Audit Committee should

note that any comparisons made with respect to the Property to the Selected Comparable

Properties serve as an illustrative guide only.

4.6. Occupancy Rates

We are advised that the Property has a total committed occupancy of 97.9% as at

31 December 2015.

JTC5, in their latest release of the third quarter 2015 stock and vacancy statistics, noted that

the vacancy rate of the business park sector was 15.6% in third quarter 2015.

CBRE Singapore6 noted that vacancy rates for business parks declined from 10.4% to 9.1%

in the third quarter of 2015 as the demand for quality business park space has increased. It

also noted that there are no planned business park developments beyond 2016. As such,

they expect vacancy rates for this particular sector to grow even tighter.

According to the information above, the committed occupancy of One@Changi City is higher

than the occupancy rate of 84.4% and 90.9% according to JTC and CBRE Singapore

respectively, for the business park sector.

5. EVALUATION OF THE PROPOSED ISSUANCE OF THE CONSIDERATION UNITS

In our evaluation of the proposed issuance of the Consideration Units, we have taken into

account the following key factors:

(i) the rationale for the proposed issuance of Consideration Units; and

(ii) the evaluation of the issue price of the Consideration Units.

These factors are discussed in greater detail in the ensuing paragraphs.

5 http://www.jtc.gov.sg/industrial-property-market-statistics/pages/stock-and-vacancy-rate.aspx

6 http://www.cbre.com.sg/aboutus/mediacentre/mediaarchives/Pages/60-per-cent-of-total-available-business-park-

space-pre-committed;-No-new-business-park-space-available-post-2016-Sector-cou.aspx

C-16

5.1. The rationale for the proposed issuance of Consideration Units

As set out in Paragraph 4 of the Letter to Unitholders, the proposed issuance of the

Consideration Units to the Vendor (or its nominee(s)), which is 50.0% owned by APL, will

enhance the alignment of the interests of APL with that of A-REIT and its minority

Unitholders. The Vendor has nominated ALS to receive the Consideration Units and in return,

the Vendor will receive cash of S$210.0 million from ALS. This also demonstrates APL’s

commitment to support A-REIT’s growth strategy and allows A-REIT to manage its capital

structure and create more debt headroom for future growth.

As part payment to the Vendor (or its nominee(s)) in the form of Units will only be made on

Completion Date, there will be no impact on the DPU for the period from the date of the

Option Agreement to the date of the issuance of the Consideration Units.

5.2. The evaluation of the issue price of the Consideration Units

As mentioned in Paragraph 3.1 of the Letter to Unitholders, “the issue price of the

Consideration Units will be the same as the issue price for the Units issued under the Private

Placement (being S$2.223 per Unit, which had been determined in accordance with the

provisions of the Trust Deed and the Listing Manual and taking into account, inter alia,

market conditions).” Accordingly, 94,466,936 Units will be issued to the Vendor (or its

nominee(s)) upon completion of the Proposed Acquisition.

Given the inherent unpredictability of stock prices on any securities exchange, the 10-day

VWAP for a Unit immediately preceding the date of Completion is likely to differ from the

issue price under the Equity Fund Raising as announced in the EFR Announcements. To

avoid such an incongruity given that the Consideration Units and the new Units under the

Equity Fund Raising are to be issued for the same purpose of partly funding the Total

Acquisition Cost, the issue price of the Consideration Units will be the same as the issue

price for the Units issued under the Private Placement.

Pursuant to Clause 5.2.6 of the Trust Deed, as the Consideration Units are issued as partial

consideration for the Proposed Acquisition and which is in conjunction with the Private

Placement meant to partially finance the Proposed Acquisition, the Manager has the

discretion to determine that the issue price of the Consideration Units is to be the same as

the issue price for the Units issued under the Private Placement. In addition, the Manager

has decided that the issue price of the Consideration Units will be the same as the issue price

for the Units issued under the Private Placement as (a) the Vendor is desirous of certainty

with respect to the issue price of the Consideration Units and (b) this will put the Vendor in

a position that is on par with the incoming investors under the Private Placement.

The issue price of S$2.223 per Consideration Unit represents a discount of:

(i) 6.2% to the volume weighted average price (“VWAP”) of S$2.3706 per Unit for trades

in the Units done on the SGX-ST for the full Market Day on 8 December 2015 (being the

Market Day preceding the day on which the placement agreement in connection with

the Private Placement was signed) and up to the time the placement agreement was

signed on 9 December 2015; and

(ii) (for illustrative purposes only) 5.0% to the adjusted VWAP1 of S$2.3400 per Unit.

1 The adjusted VWAP is computed based on the VWAP of all trades in the Units on the SGX-ST on the full Market

Day on 8 December 2015 (being the Market Day preceding the day the placement agreement in connection with the

Private Placement was signed) and up to the time the placement agreement was signed on 9 December 2015 and

subtracting the Estimated Advanced Distribution.

C-17


immediately preceding the date of issue of the Consideration Units, and will only be entitled

to receive distributions by A-REIT from the date of their issue to the end of the semi-annual

financial period in which the Consideration Units are issued, as well as all distributions

thereafter.

The Consideration Units shall be issued on the date of Completion (the “Completion Date”)

under a temporary stock counter from the existing A-REIT stock counter, such temporary

stock counter to be maintained for the period commencing from the date of issue of the

Consideration Units to the last day of “cum-distribution” trading for the existing Units, in

respect of the distribution period from 18 December 2015 to 31 March 2016 (or such other

period as the Manager may determine). After the last day of “cum-distribution” trading, both

the Consideration Units and the existing Units will be aggregated and traded under the

existing A-REIT stock counter on the Main Board of the SGX-ST. The Consideration Units will

not be entitled to participate in A-REIT’s distribution for the period immediately preceding the

date of issue of the Consideration Units.

The Vendor has nominated ALS to receive the Consideration Units and in return, the Vendor

will receive S$210.0 million in cash from ALS.

5.2.1. Historical Unit price performance

We highlight that under ordinary circumstances, the market valuation of a Unit traded

on a recognised stock exchange may be affected by, inter alia, its relative liquidity,

the size of its free float, the extent of research coverage, the investor interest it

attracts and the general market sentiment at a given period in time. Unitholders

should also note that the past trading performance of the Units should not be relied

upon as a guide of their future trading performance. Therefore, this analysis serves

as an illustrative guide only.

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

-

0.50

1.00

1.50

2.00

2.50

3.00

1/2

3/2

015

2/7

/2015

2/2

2/2

015

3/9

/2015

3/2

4/2

015

4/8

/2015

4/2

3/2

015

5/8

/2015

5/2

3/2

015

6/7

/2015

6/2

2/2

015

7/7

/2015

7/2

2/2

015

8/6

/2015

8/2

1/2

015

9/5

/2015

9/2

0/2

015

10/5

/2015

10/2

0/2

015

11/1

9/2

015

12/4

/2015

12/1

9/2

015

1/3

/2016

1/1

8/2

016

Last Price

Av Price

Issue Price:

2.223

Volume

11/4

/2015

C-18

Source: Bloomberg

We note that during the last 1-year period prior to the Latest Practicable Date, the

closing price of the Units ranged between a low of S$2.13 to a high of S$2.68.

5.2.2. Precedent Placements to Interested Persons

We have considered the details of other completed placements undertaken by

SGX-ST listed companies and REITs wherein there was a placement of shares

and/or units to an interested person. A summary of the transactions are as follows:

Acquirer

Property

Acquired Date

Unitholding

of

Interested

person

prior to

placement

(%)

Total

proceeds

raised

(SGD m)

Issue /

Subscription

Price

(S$)

Premium

over /

(Discount to)

VWAP for

trades done

on the

SGX-ST for

the full

market day

prior to the

date of price

announcement

Premium

over /

(Discount

to)

adjusted

VWAP(1)

Premium

over /

(Discount

to)

NAV(2)

Ascott

Residence

Trust

Serviced

residences Aug-10 47.74 453.2 1.08 (5.4%) (4.7%) (19.4%)

CapitaLand

Retail

China

Trust

Minzhong

Mall May-11 41.17 70.0 1.17 (6.5%) (3.2%) 0.0%

Frasers

Centrepoint

Trust

Bedok

Point Aug-11 43.20 66.7 1.39 (3.9%) (2.5%) 9.4%

Frasers

Centrepoint

Trust

Changi

City Point May-14 41.10 161.5 1.84 (3.6%) (2.5%) 4.0%

A-REIT

One@

Changi

City Jan-16 17.4 200.1 2.223 (6.2%) (5.0%) 6.9%

Sources: SGX, Announcements and Circulars to Shareholders

Notes:

(1) Based on the adjusted VWAP, computed based on the VWAP of all trades in the Units on the

SGX-ST on the full Market Day prior to placement, subtracting the respective estimated advanced

distribution.

(2) Based on NAV per unit before completion of the acquisition.

For the transactions above, Ascott Residence Trust raised funds via a preferential

offering of new units in addition to a private placement. The remaining three

transactions raised funds via a private placement made available to interested

parties or institutional and third party investors. The issue price of all the above

transactions was at a discount to the VWAP for trades executed for the full market

day on the date of signing.

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5.2.3. Status of the Consideration Units


immediately preceding the date of issue of the Consideration Units, and will only be

entitled to receive distributions by A-REIT from the date of their issue to the end of

the semi-annual financial period in which the Consideration Units are issued, as well

as all distributions thereafter.

Save as set out above, the Consideration Units will, upon issue, rank pari passu in

all respects with the Units in issue on the day immediately preceding the date of issue

of the Consideration Units.

6. EXISTING INTERESTED PARTIES TRANSACTIONS

6.1. Corporate Governance – Dealings with Interested Persons

We note that the Manager has in place policies and procedures to ensure that all Interested

Parties Transactions are identified, evaluated, presented for review and approval and

reported when required. This includes compliance with the provisions in the Listing Manual

relating to Interested Persons Transactions and the provisions as set out in the Property

Funds Guidelines relating to Interested Parties Transactions. The Interested Parties

Transactions included all payments on behalf to and from an Interested Party or was passed

through costs.

We note that the Manager has also established internal control procedures to ensure that all

Interested Parties Transactions were conducted at arm’s length and were undertaken on

normal commercial terms, which are not prejudicial to the interests of A-REIT and its minority

Unitholders. As a general rule, the Manager will have to demonstrate to the Audit Committee

that the transactions have been undertaken on normal commercial terms, which may include

obtaining quotations from parties unrelated to the Manager or engaging an external

specialist or adviser to advice on the appropriate pricing of the proposed transaction.

Role of the Audit Committee for Interested Parties Transactions

The Audit Committee will periodically review all Interested Parties Transactions to ensure

compliance with the internal control procedures and with the relevant provisions of the SGX

Listing Manual and the Property Funds Appendix. The review will include the examination of

the nature of the transaction, the supporting documents and such other information deemed

necessary to the Audit Committee

If a member of the Audit Committee has an interest in any transaction, he shall abstain from

participating in the review and approval process in relation to such transaction.

6.2. Existing Interested Persons Transactions which are the subject of aggregation

pursuant to Rule 906 of the Listing Manual

The Existing Interested Persons Transactions as set out in Appendix D of the Circular are

undertaken in the ordinary course of A-REIT’s business. We have reviewed these

transactions and the internal review and control procedures adopted by the Manager and the

Audit Committee in respect of the Existing Interested Person Transactions which are the

subject of aggregation pursuant to Rule 906.

We are of the opinion that the Existing Interested Persons Transactions are undertaken on

normal commercial terms and not prejudicial to the interests of A-REIT and its minority

Unitholders.

C-20

7. RECOMMENDATION

In arriving at our recommendation in respect of the Proposed Transactions, we have

considered, inter alia, the following factors summarized below which we consider to be

pertinent in our assessment of the Proposed Transactions:

The Proposed Acquisition

(a) the rationale for the Proposed Acquisition;

(b) pro forma financial effects of the Proposed Acquisition;

(c) valuations of the Property prepared by the Independent Valuers;

(d) property yield of the Property as compared to comparable properties owned by A-REIT;

(e) property yield of the Property as compared to comparable properties owned by other

REITs; and

(f) occupancy rates.

The Proposed Issuance of the Consideration Units

(a) the rationale for the proposed issuance of Consideration Units;

(b) the basis for the determination of the issue price of the Consideration Units is consistent

with that as set out in the trust deed of A-REIT;

(c) the Consideration Units will, upon issue and allotment, be excluded from the right to any

distributions which may accrue prior to the issuance of the Consideration Units;

(d) the Proposed Acquisition (taking into consideration the proposed issuance of the

Consideration Units) is NAV accretive as the pro forma NAV of A-REIT is expected to

increase 0.5% from S$2.08 to S$2.09; and

(e) the issue price of the Consideration Units will be the same as the issue price of the Units

issued under the Private Placement, which was determined by the Manager and the

sole manager and underwriter following a book-building process.

Based upon the analysis undertaken by us and subject to the qualifications and

assumptions made in this Letter, we are of the opinion that as at the Latest Practicable

Date, 22 January 2016, the Proposed Acquisition and the Proposed Issuance of the

Consideration Units are on normal commercial terms and are not prejudicial to the

interests of A-REIT and its minority Unitholders. We therefore advise the Independent

Directors to recommend that Unitholders vote in favour of the Proposed Acquisition

and the proposed issuance of the Consideration Units at the Extraordinary General

Meeting.

We wish to emphasise that we have been appointed to render our opinion as of the Latest

Practicable Date. Our terms of reference do not require us to express, and we do not

express, an opinion on the future growth prospects of Ascendas Funds Management (S)

Limited. This letter is addressed to the Independent Directors and Audit Committee for their

benefit in connection with and for the purpose of their consideration of the Proposed

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Transactions. The recommendations made by the Independent Directors to the Unitholders

in relation to the Proposed Transactions remain the sole responsibility of the Independent

Directors.

This letter is governed by, and construed in accordance with the laws and courts of

Singapore, and is strictly limited to the matters stated herein and does not apply by

implication to any other matter. A copy of this letter will be reproduced in the Circular.

Yours Faithfully,

For and behalf of

Hong Leong Finance Limited

Tang Yeng Yuen Kaeson Chui

Vice President Vice President

C-22

APPENDIX D

EXISTING INTERESTED PERSON TRANSACTIONS

The table below sets out details of all Existing Interested Person Transactions entered into

between (1) A-REIT and (2) THPL, JTC, Ascendas Pte Ltd and their respective subsidiaries and

associates, during the course of the current financial year up to the Latest Practicable Date, which

are the subject of aggregation pursuant to Rule 906 of the Listing Manual.

No. Interested Person Nature of Transaction Value of

Transaction

(S$’000)

1 JTC Corporation Land premium and administrative fees

paid on land acquisition for the egress

road at Giant Hypermart

874

2 Stats Chippac Ltd Rent and service charge in relation to

a lease at Techpoint

1,314

3 ST Electronics (Training &

Simulation Systems) Pte Ltd

Lease rental and service charge in

relation to a lease at Techpoint

366

4 Singtel Limited Facilities management and utilities

charges in relation to a lease at

Telepark

292

5 Ascendas (Tuas) Pte Ltd Incentive payment in relation to the

construction of DBS Phase II, pursuant

to the sale and purchase agreement

for the acquisition of DBS Asia Hub

3,020

6 Ascendas Funds Management

(S) Limited

Reimbursement of amounts

received/paid on behalf, rent and

utilities charges and payment of

deposits in relation to leases at certain

properties

1,379

7 Ascendas Services Pte Ltd Carpark licence fees in relation to 3

Changi Business Park Crescent and

reimbursement of amounts

received/paid on behalf

676

8 Ascendas Land (Singapore)

Pte Ltd

Common services fees in relation to

certain properties and utilities charges

for a lease at The Galen

392

9 Surbana Technologies Pte Ltd Licence fees in relation to inspection

of mobile systems

148

Total 8,461

These Existing Interested Person Transactions have been subject to internal control procedures

established by the Manager to ensure that such transactions are undertaken on normal

commercial terms and are not prejudicial to the interest of A-REIT and its minority Unitholders.

These procedures include the review and approval of such transactions by the Audit Committee,

as appropriate.

D-1

Details of the Existing Interested Person Transactions

(1) Transactions with JTC Corporation

JTC indirectly owns a 49.0% interest in the Manager and is hence an interested person of

A-REIT.

The payments to JTC were mainly in relation to land premium and administrative fees paid

on land acquisition for the egress road at Giant Hypermart.

The transaction with JTC was entered into in the ordinary course of business and the

amounts paid to JTC were on an arm’s length basis, based on normal commercial terms.

(2) Transactions with Stats Chippac Ltd

Stats Chippac Ltd is a subsidiary of THPL and is hence an interested person of A-REIT.

A lease for certain units at Techpoint was signed with Stats Chippac Ltd (“Stats Chippac”).

The lease commences in August 2015 and will terminate in September 2018.

The transactions with Stats Chippac were entered into in the ordinary course of business and

the amounts paid by Stats Chippac were on an arm’s length basis, based on normal

commercial terms.

(3) Transactions with ST Electronics (Training & Simulation Systems) Pte Ltd

ST Electronics (Training & Simulation Systems) Pte Ltd (“ST Electronics”) is a subsidiary of

THPL and is hence an interested person of A-REIT.

A lease for certain units at Techpoint was signed with ST Electronics. The lease commences

in August 2015 and will terminate in February 2018.

The transactions with ST Electronics were entered into in the ordinary course of business

and the amounts paid by ST Electronics were on an arm’s length basis, based on normal

commercial terms.

(4) Transactions with Singtel Limited

Singtel Limited (“Singtel”) is a subsidiary of THPL and is hence an interested person of

A-REIT.

The facilities management and utilities charges received from Singtel were in relation to an

existing lease at Telepark.

The transactions with Singtel were entered into in the ordinary course of business and the

amounts paid by Singtel were on an arm’s length basis, based on normal commercial terms.

(5) Transactions with Ascendas (Tuas) Pte Ltd

Ascendas (Tuas) Pte Ltd (“A-Tuas”) is a related company of the Manager and is hence an

interested person of A-REIT.

The incentive payment to A-Tuas was in relation to the construction of DBS Phase II,

pursuant to the sale and purchase agreement with A-Tuas for the acquisition of DBS Asia

Hub.

D-2

The transaction with A-Tuas was entered into in the ordinary course of business and the

amount paid to A-Tuas was on an arm’s length basis, based on normal commercial terms.

(6) Transactions with Ascendas Funds Management (S) Limited

Ascendas Funds Management (S) Limited is the Manager of A-REIT and is hence an


The reimbursement of amounts received on behalf relates primarily to grants received by the

Manager on behalf of A-REIT. The rent and utilities charges, and the payment of deposits,

were in relation to existing leases at certain properties in both Singapore and China.

The transactions with the Manager were entered into in the ordinary course of business and

the amounts paid by the Manager were on an arm’s length basis, based on normal

commercial terms.

(7) Transactions with Ascendas Services Pte Ltd

Ascendas Services Pte Ltd (“ASPL”) is a related company of the Manager and is hence an


The carpark licence fees income received from ASPL relates to the granting of a licence for

ASPL to operate and manage the car park facilities at 3 Changi Business Park Crescent.

ASPL has also sought reimbursement from A-REIT for certain operating expenses incurred

on behalf of A-REIT.

The transaction with ASPL was entered into in the ordinary course of business and the

amount paid to ASPL was on an arm’s length basis, based on normal commercial terms.

(8) Transactions with Ascendas Land (Singapore) Pte Ltd

Ascendas Land (Singapore) Pte Ltd (“ALS”) is a related company of the Manager and is

hence an interested person of A-REIT.

Transactions relate to common services fees paid to ALS for A-REIT’s share of common

services provided to several properties located in the science parks and utilities income

received from ALS in relation to a lease at The Galen.

The transactions with ALS were entered into in the ordinary course of business and the

amount paid to ALS/received from ALS was on an arm’s length basis, based on normal

commercial terms.

(9) Transactions with Surbana Technologies Pte Ltd

Surbana Technologies Pte Ltd (“Surbana”) is a subsidiary of THPL and is hence an


The transaction relates to licence fees paid to Surbana for inspection services.

The transaction with Surbana was entered into in the ordinary course of business and the

amount paid to Surbana was on an arm’s length basis, based on normal commercial terms.

D-3

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NOTICE OF EXTRAORDINARY GENERAL MEETING



NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting (“EGM”) of the holders of units of Ascendas Real Estate Investment Trust (“A-REIT”, and the holders of units of A-REIT, “Unitholders”) will be held on Tuesday, 16 February 2016 at 3.00 p.m. at Aperia, 10 Kallang Avenue, Tower 1, Level 3 Rose Room, Singapore 339510, for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions (capitalised terms not otherwise defined herein shall bear the meanings ascribed to them in the circular dated 29 January 2016 to Unitholders (the “Circular”)):

1. ORDINARY RESOLUTION 1

THE PROPOSED ACQUISITION OF ONE@CHANGI CITY

That:

(i) approval be and is hereby given for the proposed acquisition (the “ProposedAcquisition”) of the property located at 1 Changi Business Park Central 1, Singapore

486036 and commonly known as One@Changi City, together with the plant and

equipment therein (the “Property”), from Ascendas Frasers Pte. Ltd. (the “Vendor”), on

the terms and conditions set out in the put and call option agreement dated 9 December

2015 (the “Option Agreement”) and the sale and purchase agreement (the “PurchaseAgreement”) to be entered into between HSBC Institutional Trust Services (Singapore)

Limited, as trustee of A-REIT (the “Trustee”) and the Vendor, and the entry into of the

Option Agreement and the Purchase Agreement be and is hereby approved and/or

ratified;

(ii) approval be and is hereby given for the payment of all fees and expenses relating to the

Proposed Acquisition; and

(iii) Ascendas Funds Management (S) Limited, as the manager of A-REIT (the “Manager”),

any director of the Manager, and the Trustee be and are hereby severally authorised to

complete and do all such acts and things (including executing all such documents as

may be required) as the Manager, such director of the Manager or, as the case may be,

the Trustee may consider expedient or necessary or in the interests of A-REIT to give

effect to the Proposed Acquisition and all transactions in connection therewith.

2. ORDINARY RESOLUTION 2

THE PROPOSED ISSUANCE OF NEW UNITS AT AN ISSUE PRICE OF S$2.223 PER UNIT

AS PARTIAL CONSIDERATION FOR THE PROPOSED ACQUISITION OF ONE@CHANGI

CITY

That subject to and contingent upon the passing of Resolution 1:

(i) approval be and is hereby given for the Manager to issue, in the manner described in

the Circular, the Consideration Units (as defined in the Circular) to the Vendor (or its

nominee(s)) in relation to the Proposed Acquisition. The Vendor has nominated ALS (a

wholly-owned subsidiary of APL) to receive the Consideration Units; and

E-1

(ii) the Manager, any director of the Manager, and the Trustee be and are hereby severally

authorised to complete and do all such acts and things (including executing all such

documents as may be required) as the Manager, such director of the Manager or, as the

case may be, the Trustee may consider expedient or necessary or in the interests of

A-REIT to give effect to the issuance of the Consideration Units.

BY ORDER OF THE BOARD


(Registration Number: 200201987K)

as manager of Ascendas Real Estate Investment Trust

Mary Judith de Souza

Company Secretary

Singapore

29 January 2016

Notes:

(1) A Unitholder who is not a relevant intermediary entitled to attend and vote at the EGM of A-REIT is entitled to appoint

one or two proxies to attend and vote in his/her stead. A proxy need not be a Unitholder. Where a Unitholder appoints

more than one proxy, the appointments shall be invalid unless he/she specifies the proportion of his/her holding

(expressed as a percentage of the whole) to be represented by each proxy.

(2) A Unitholder who is a relevant intermediary entitled to attend and vote at the EGM is entitled to appoint more than

two proxies to attend and vote instead of the Unitholder, but each proxy must be appointed to exercise the rights

attached to a different Unit or Units held by such Unitholder. Where such Unitholder appoints more than two proxies,

the appointments shall be invalid unless the Unitholder specifies the number of Units in relation to which each proxy

has been appointed.

“relevant intermediary” means:

(a) a banking corporation licensed under the Banking Act, Chapter 19 of Singapore or a wholly-owned subsidiary

of such a banking corporation, whose business includes the provision of nominee services and who holds

Units in that capacity;

(b) a person holding a capital markets services licence to provide custodial services for securities under the

Securities and Futures Act Chapter 289 of Singapore and who holds Units in that capacity; or

(c) the Central Provident Fund Board (“CPF Board”) established by the Central Provident Fund Act, Chapter 36

of Singapore, in respect of Units purchased under the subsidiary legislation made under that Act providing for

the making of investments from the contributions and interest standing to the credit of members of the Central

Provident Fund, if the CPF Board holds those Units in the capacity of an intermediary pursuant to or in

accordance with that subsidiary legislation.

(3) The proxy form must be deposited at the Unit Registrar’s office at Boardroom Corporate & Advisory Services Pte.

Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623 no later than Saturday, 13 February 2016

at 3.00 p.m., being 72 hours before the time fixed for the EGM of A-REIT.

Personal Data Privacy:

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the EGM of

A-REIT and/or any adjournment thereof, a Unitholder (i) consents to the collection, use and disclosure of the Unitholder’s

personal data by the Manager and the Trustee (or their agents) for the purpose of the processing and administration by

the Manager and the Trustee (or their agents) of proxies and representatives appointed for the EGM of A-REIT (including

any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents

relating to the EGM of A-REIT (including any adjournment thereof), and in order for the Manager and the Trustee (or their

agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii)

warrants that where the Unitholder discloses the personal data of the Unitholder’s proxy(ies) and/or representative(s) to

the Manager and the Trustee (or their agents), the Unitholder has obtained the prior consent of such proxy(ies) and/or

representative(s) for the collection, use and disclosure by the Manager and the Trustee (or their agents) of the personal

data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the Unitholder will indemnify the

Manager and the Trustee in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the

Unitholder’s breach of warranty.

E-2

ASCENDAS REAL ESTATE INVESTMENT TRUST(Constituted in the Republic of Singapore pursuant

to a trust deed dated 9 October 2002 (as amended))

PROXY FORMExtraordinary General Meeting

IMPORTANT

1. A relevant intermediary may appoint more than twoproxies to attend the EGM and vote (please seeNote 2 for the definition of “relevant intermediary”).

2. This Proxy Form is not valid for use by CPFInvestors and shall be ineffective for all intents andpurposes if used or is purported to be used by them.

3. PLEASE READ THE NOTES TO THE PROXYFORM

Personal data privacy

By submitting an instrument appointing a proxy(ies)and/or representative(s), the unitholder accepts andagrees to the personal data privacy terms set out in theNotice of EGM dated 29 January 2016.

I/We (Name(s) (NRIC/Passport/

Company Registration Number) of (Address)

being a unitholder/unitholders of Ascendas Real Estate Investment Trust (“A-REIT”), hereby appoint:

Name AddressNRIC/Passport

Number

Proportion of Unitholdings

(Note 2)

No. of Units %

and/or (delete as appropriate)

Name AddressNRIC/Passport

Number

Proportion of Unitholdings

(Note 2)

No. of Units %

or, both of whom failing, the Chairman of the Extraordinary General Meeting of A-REIT (“EGM”) as my/our

proxy/proxies to attend and to vote for me/us on my/our behalf at the EGM to be held at Aperia, 10 Kallang Avenue,

Tower 1, Level 3 Rose Room, Singapore 339510, on Tuesday, 16 February 2016 at 3.00 p.m., and at any

adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the resolutions to be proposed at the

EGM as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from

voting at his/her/their discretion, as he/she/they will on any other matter arising at the EGM.

ResolutionsNumber of Votes

For*Number of Votes

Against*

1 To approve the Proposed Acquisition

2 To approve the proposed issuance of the Consideration Units

(Conditional upon Resolution 1 being passed)

* If you wish to exercise all your votes “For” or “Against”, please mark with an “3” within the relevant box provided.

Alternatively, please indicate the number of votes as appropriate.

Dated this day of 2016

Total Number of Units held

Signature(s) of Unitholder(s)/Common Seal of Corporate Unitholder

IMPORTANT: PLEASE READ NOTES TO PROXY FORM ON REVERSE PAGE

-----------------------------------------------------------------------------------------------------------------------------------------------

"

IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOW

NOTES TO PROXY FORM:

1. A Unitholder who is not a relevant intermediary entitled to attend and vote at the EGM of A-REIT is entitled to appoint one or two proxies toattend and vote in his/her stead. A proxy need not be a Unitholder. Where a Unitholder appoints more than one proxy, the appointments shallbe invalid unless he/she specifies the proportion of his/her holding (expressed as a percentage of the whole) to be represented by each proxy.

2. A Unitholder who is a relevant intermediary entitled to attend and vote at the EGM is entitled to appoint more than two proxies to attend andvote instead of the Unitholder, but each proxy must be appointed to exercise the rights attached to a different Unit or Units held by suchUnitholder. Where such Unitholder appoints more than two proxies, the appointments shall be invalid unless the Unitholder specifies thenumber of Units in relation to which each proxy has been appointed.

“relevant intermediary” means:

(a) a banking corporation licensed under the Banking Act, Chapter 19 of Singapore or a wholly-owned subsidiary of such a bankingcorporation, whose business includes the provision of nominee services and who holds Units in that capacity;

(b) a person holding a capital markets services licence to provide custodial services for securities under the Securities and Futures ActChapter 289 of Singapore and who holds Units in that capacity; or

(c) the Central Provident Fund Board (“CPF Board”) established by the Central Provident Fund Act, Chapter 36 of Singapore, in respectof Units purchased under the subsidiary legislation made under that Act providing for the making of investments from the contributionsand interest standing to the credit of members of the Central Provident Fund, if the CPF Board holds those Units in the capacity of anintermediary pursuant to or in accordance with that subsidiary legislation.

3. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his/her name in the Depository Registermaintained by The Central Depository (Pte) Limited (“CDP”), he/she should insert that number of Units. If the Unitholder has Units registeredin his/her name in the Register of Unitholders of A-REIT, he/she should insert that number of Units. If the Unitholder has Units entered againsthis/her name in the said Depository Register and registered in his/her name in the Register of Unitholders of A-REIT, he/she should insert theaggregate number of Units. If no number is inserted, the proxy form will be deemed to relate to all the Units held by the Unitholder.

4. The instrument appointing a proxy or proxies (the “Proxy Form”) must be deposited at the Unit Registrar’s office at Boardroom Corporate &Advisory Services Pte. Ltd., 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, no later than Saturday, 13 February 2016 at3.00 p.m., being 72 hours before the time fixed for the EGM.

5. The Proxy Form must be executed under the hand of the appointor or of his/her attorney duly authorised in writing. Where the Proxy Form isexecuted by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.

6. Where the Proxy Form is signed on behalf of the appointor by an attorney or a duly authorised officer, the power of attorney or other authority(if any) under which it is signed, or a notarially certified copy of such power or authority must (failing previous registration with the Manager)be lodged with the Proxy Form, failing which the Proxy Form may be treated as invalid.

7. The Manager shall be entitled to reject any Proxy Form which is incomplete, improperly completed, illegible or where the true intentions of theappointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. In addition, in the case of Units enteredin the Depository Register, the Manager may reject any Proxy Form if the Unitholder, being the appointor, is not shown to have Units enteredagainst his/her name in the Depository Register not less than 72 hours before the time appointed for holding the EGM, as certified by CDPto the Manager.

8. All Unitholders will be bound by the outcome of the EGM regardless of whether they have attended or voted at the EGM.

9. On a poll, every Unitholder who is present in person or by proxy shall have one vote for every Unit of which he/she is the Unitholder. Thereshall be no division of votes between a Unitholder who is present in person and voting at the EGM and his/her proxy(ies). A person entitledto more than one vote need not use all his/her votes or cast them the same way.

Personal data privacy:

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the Extraordinary General Meeting and/orany adjournment thereof, a Unitholder (i) consents to the collection, use and disclosure of the Unitholder’s personal data by the Manager and theTrustee (or their agents) for the purpose of the processing and administration by the Manager and the Trustee (or their agents) of proxies andrepresentatives appointed for the Extraordinary General Meeting (including any adjournment thereof) and the preparation and compilation of theattendance lists, minutes and other documents relating to the Extraordinary General Meeting (including any adjournment thereof), and in order for theManager and the Trustee (or their agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”),(ii) warrants that where the Unitholder discloses the personal data of the Unitholder’s proxy(ies) and/or representative(s) to the Manager and theTrustee (or their agents), the Unitholder has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosureby the Manager and the Trustee (or their agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agreesthat the Unitholder will indemnify the Manager and the Trustee in respect of any penalties, liabilities, claims, demands, losses and damages as a resultof the Unitholder’s breach of warranty.

BOARDROOM CORPORATE & ADVISORY SERVICES PTE. LTD.

(as Unit Registrar of Ascendas Real Estate Investment Trust)

50 Raffles Place

#32-01 Singapore Land Tower

Singapore 048623

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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -2nd fold here

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Stamp

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KALLA

NG

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LAVENDER STREET

BUS STO

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07371

CAR PARK/D

ROP-OFF

ENTRANCE

BUS STO

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07379

LAVENDER

CAR PARK

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DKALLANG AVENUE

DROP

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PEDESTRIAN LINK MALL

PUBLIC LIFT LOBBY A

RETAIL ATRIUM

APERIA

Location of meeting:

Aperia, 10 Kallang Avenue

Tower 1, Level 3 Rose Room

Singapore 339510

By Taxi or Car:

The drop-off point and car park at Aperia is

accessible via Kallang Avenue. Alternative parking

is available at CT Hub2 or Kallang Avenue

Industrial Estate.

Rose Room, on Level 3, is accessible via the Public

Lift Lobby A from the car park.

By MRT & Public Buses:

The nearest MRT station is Lavender Station on the

East-West Line (EW11, green line).

The two nearest bus stops along Lavender Street are

B07379 and B07371. Public buses that serve these bus

stops are 13, 61, 67, 107, 133, 141, 145, 175 and 961.

Please proceed to the Pedestrian Link Mall and take

the escalator/lift at Public Lift Lobby A to Level 3,

where the Rose Room is located.

DIRECTIONS TO A-REIT EXTRAORDINARY GENERAL MEETING

Kallang A

ve

Industri

al

Estate

CT

Hub2